Economic theory indicates that as a larger share of medical services are paid for by a third party (for example, insurance companies or the government) rather than directly by the consumer,
a. consumers will have a stronger incentive to economize.
b. consumers will have a weaker incentive to economize and the prices of medical services will rise more rapidly than would otherwise be the case.
c. consumers will have a weaker incentive to economize, but medical service suppliers will have a stronger incentive to keep prices low.
d. the suppliers of medical services will have more incentive to economize.
B
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The crowding in of private investment is associated with: a. a leftward shift of the aggregate demand curve for an economy
b. a leftward shift of the aggregate supply curve of an economy. c. a reduction in the level of government spending. d. a reduction in corporate income taxes. e. an increase in aggregate demand induced by increased government borrowing.
If a nation has flexible exchange rates and its current and captial accounts equal zero, then the:
a. Financial account must be positive b. Financial account must be zero. c. Reserves account can be positive or negative depending on the size of the budget deficit and exchange rate. d. Financial account plus reserves account must equal zero.
A binding price ceiling causes a shortage in the market
a. True b. False Indicate whether the statement is true or false
Keynesians believe the economy can be managed using monetary and fiscal policy.
Answer the following statement true (T) or false (F)