Which of the following happens during a recession?
A) Labor demand increases. B) The equilibrium wage rate rises.
C) Labor supply falls. D) The equilibrium wage rate falls.
D
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If fewer families purchase health insurance because of rising health insurance premiums, then health insurance premiums are likely to rise further due to:
A. commitment problems. B. moral hazard. C. adverse selection. D. first-dollar coverage.
Suppose your bank raises its minimum-balance requirement for free checking on checking accounts by $500. You take $500 out of your passbook savings account and put it in your checking account. What is the overall effect on M1 and M2?
A) M1 rises by $500, M2 falls by $500. B) M1 is unchanged, M2 is unchanged. C) M1 rises by $500, M2 is unchanged. D) M1 is unchanged, M2 falls by $500.
A horizontal demand curve indicates:
A. a perfectly inelastic demand. B. quantity demanded will drop to zero if the price increases by any amount. C. price elasticity is 1. D. price is not important in this market.
Not buying junk food while doing the weekly shopping and forcing an extra trip to the store to acquire it is an example of:
A. increasing the cost of a vice. B. a commitment device. C. how people compensate for time-inconsistent decisions. D. All of these are true.