In addition to covering the costs of unpredictable events, health insurance typically covers many planned expenses, such as routine checkups, annual physicals, and the cost of vaccinations. Because of this, health insurance
A) discourages overuse of health care services.
B) encourages overuse of health care services.
C) generates an efficient quantity of health care services.
D) is not accepted by most doctors and hospitals.
Answer: B
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For some economists, it is hard to refute the validity of the war-induced theory of business cycles because for World War I, World War II, and the Korean War, the war- induced expansion came
a. when the economy was in the upswing or peak phase of an already existing cycle b. when the economy was in the upswing or trough phase of an already existing cycle c. when the economy was in the downswing or trough phase of an already existing cycle d. when the war was already over, causing a downswing in an already existing cycle e. in the aftermath of each war
If a market reflects a shortage and prices are allowed to move:
A) supply will increase. B) demand will decrease. C) price will decrease. D) price will increase.
Salaries of employees under guaranteed contracts would be an example of a ________ cost.
Fill in the blank(s) with the appropriate word(s).
Refer to the diagram, in which Q f is the full-employment output. If aggregate demand curve AD 3 describes the current situation, appropriate fiscal policy would be to:
A. do nothing since the economy appears to be achieving full-employment real output.
B. increase taxes and reduce government spending to shift the aggregate demand curve leftward from AD 3 to AD 2 , assuming downward price flexibility.
C. increase taxes on businesses to shift the aggregate supply curve rightward to reduce the
price level.
D. increase taxes and reduce government spending to shift the aggregate demand curve from
AD 3 to AD 1