By requiring that applicants for insurance policies fill out lengthy forms and take a physical examination, insurers attempt to guard against
a. symmetrical information
b. adverse selection
c. natural selection
d. moral hazard
e. the winner's curse
B
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Which of the following statements about the tax cut enacted in 1981 is correct? a. The tax cut caused the recession of 1982
b. The tax cut and the recession of 1982 combined to produce one of the largest peace-time deficits ever experienced up to that time. c. The tax cut stimulated a large increase in economic activity and led directly to the balanced budget of 1982. d. The tax cut was opposed by supply-side economists. e. The tax cut was favored by Congress but opposed by the President and passed over his veto.
The irrelevance of monetary changes for real variables is called monetary neutrality. Most economists accept monetary neutrality as a good description of the economy in the long run, but not the short run
a. True b. False Indicate whether the statement is true or false
Which of the following statements is correct?
A. From the bank’s point of view, loans to customers are assets of the bank. B. From the bank’s point of view, loans to customers are liabilities of the bank. C. From the customer’s point of view, loans to customers are assets of the customer. D. From the customer’s point of view, loans to customers are liabilities of the customer. E. a and b only F. a and d only
An increase in disposable income will
A. decrease autonomous consumption. B. increase autonomous consumption. C. decrease total consumption. D. increase total consumption.