Investment in health and education
a. slows growth because it takes resources from growth-creating sectors
b. is harmful because it encourages families to have children
c. is beneficial because in improves the capabilities of the population
d. is beneficial because it provides jobs for doctors and teachers
e. none of the above
C
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Explain the relationship between real GDP and aggregate planned expenditure, AE. What change to inventories takes place when the two are not equal?
What will be an ideal response?
As aggregate output rises, the demand for money ________ and the interest rate ________, so that money demanded equals money supplied and the money market is in equilibrium
A) increases; rises B) increases; falls C) decreases; rises D) decreases; falls
If insurance companies knew how risk-averse their customers were:
A. diversification would not occur. B. risk pooling would not occur. C. policies would be perfectly diversified, resulting in lower premiums for everyone. D. adverse selection would not occur.
A firm in a competitive input market can
A) hire workers at the going wage. B) hire additional workers only by raising wages. C) hire additional workers at lower wages because those who are still unemployed are anxious to work. D) hire additional workers only after a long search process.