One difference between moral hazard and adverse selection is
a. Moral hazard has to do with unobservable characteristics of individuals
b. Moral hazard has to do with unobservable actions of individuals
c. Adverse selection is individuals change their behaviors because of a contract
d. Adverse selection is when you choose the wrong answer on a test
b
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What two factors need to increase in order to increase potential output in an economy?
What will be an ideal response?
Refer to Figure 4-5. What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?
A) D + E B) D C) D + F D) F
A renewable resource:
A. can be replenished naturally over time. B. is used to regenerate an old piece of capital. C. is used when adopting new technology, and replacing old capital. D. cannot be replenished naturally over time.
Currency and checkable deposits are:
A. debts of the Federal Reserve Banks or of financial institutions. B. the major components of the M3 definition of the money supply. C. of intrinsic value that determines the relative worth of money. D. redeemable for gold and silver from the Federal Reserve System.