Lemon laws that allow consumers to return low-quality used cars are designed to help solve the problem of ________ in used car markets.
A. moral hazard
B. thick markets
C. experience ratings
D. adverse selection
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
If Alan Shaw reduces his work hours when his salary increases, then
A) the substitution effect of his salary increase dominates the income effect. B) leisure is an inferior good to Alan. C) the income effect of his salary increase dominates the substitution effect. D) the income effect of his salary increase is completely offset by the substitution effect.
The goal of all regulation is the creation of perfectly competitive markets.
Answer the following statement true (T) or false (F)
The period of 1973 to 1980 can best be described as a time of
A. deflation. B. reflation. C. unflation. D. stagflation. E. disflation.