An example of moral hazard is
a. workers working diligently even though the boss is not looking
b. health care insured workers dieting and exercising
c. drivers of safer cars texting on their phones while driving
d. borrowers investing their loan proceeds exactly as the bank requires
c
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One reason why the plants of multinational corporations abroad may have better standards than domestic contractors in low-income countries is because multinational corporations tend to reduce costs by using one standard in terms of capital equipment
and technology for all markets. Indicate whether the statement is true or false
The economy is fully employed when there is no:
a. seasonal unemployment. b. frictional unemployment. c. structural unemployment. d. cyclical unemployment.
Cyclical unemployment refers to
a. the portion of unemployment created by job search. b. short-run fluctuations around the natural rate of unemployment. c. changes in unemployment due to changes in the natural rate of unemployment. d. the portion of unemployment created by wages set above the equilibrium level.
One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money. B. by increasing government spending. C. by setting price ceilings on most goods so people can afford them. D. None of these will help an economy in recession.