Which of the following is NOT an example of adverse selection?
A) A family with a home ten feet from a large river buys flood insurance.
B) A company uses the proceeds of a new stock sale to build an unnecessarily luxurious new headquarters.
C) A terminal cancer patient buys life insurance.
D) A company in serious financial trouble offers to pay you 30% on a loan.
B
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A demand-pull inflation initially is characterized by
A) increasing real output and a labor surplus. B) no change in real output and a labor shortage. C) decreasing real output and a labor surplus. D) decreasing real output and a labor shortage. E) increasing real output and a labor shortage.
The above figure shows the U.S. market for chocolate. With no international trade, consumer surplus is equal to
A) area A + area B + area C + area D. B) area A. C) area B + area C + area D. D) area C + area D. E) area E.
Assuming that workers will be pushed off their labor supply curve in response to a change in aggregate demand is part of which of the following theories?
A) Classical B) Keynesian C) New Classical D) Both Classical and Keynesian
Which of the following is a normative economic statement?
A) An increase in corporate income taxes will cause the unemployment rate to increase. B) The costs of medical care are increasing faster than the incomes of U.S. citizens. C) Teenage unemployment is over 12 percent today. D) Teenage unemployment is too high for the United States.