________ occurs when people smoke more after buying life insurance.
A. Adverse selection
B. Cournot and Bertrand competition
C. Asymmetric information
D. Moral hazard
Answer: D
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As more people started using smart phones, the number of smart phone applications available rose, increasing the smart phone's value to those who already owned one. This is an example of a(n) ________
A) pecuniary externality B) network externality C) moral hazard D) adverse selection
The "rational expectations" school of economists, including Robert Lucas and Thomas Sargent, argue that changes in monetary policy cannot affect unemployment rates in the short run or long run
Indicate whether the statement is true or false
When the Federal Reserve System was first established, which of the following was its chief responsibility?
a. Keeping the inflation rate low and stable b. Ensuring the stability of the banking system c. Achieving full employment of the labor force d. Keeping the interest rate low and stable e. Keeping output growth high and stable
The change in saving divided by the change in income is the
a. ratio of saving to income b. same as saving divided by income c. average propensity to save d. marginal propensity to consume e. marginal propensity to save