One reason the housing bubble occurred is because the:
A. securitization of mortgages meant more mortgages were low-risk, attracting investors.
B. herd instinct caused everyone to stop buying homes.
C. recency effect affected people's perceptions of home values.
D. All of these statements are true.
C. recency effect affected people's perceptions of home values.
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Some economists and policymakers who are in favor of government-provided health care believe that providing health care will generate
A) more adverse selection. B) additional moral hazard. C) positive externalities. D) greater asymmetric information.
High net worth helps to diminish the problem of moral hazard problem by
A) requiring the state to verify the debt contract. B) collateralizing the debt contract. C) making the debt contract incentive compatible. D) giving the debt contract characteristics of equity contracts.
If a good produced this quarter goes into inventory, then it is included in this period's GDP. If it is sold in the next quarter, it will have no effect on GDP
a. True b. False Indicate whether the statement is true or false
Jane is currently developing a model to explain the national unemployment rate. This is an example of
A) a microeconomic topic. B) normative analysis. C) positive analysis. D) how people act in an irrational manner.