What is the main reason for health insurance companies to require deductibles and coinsurance?
a. To deal with the adverse selection problem
b. To deal with the moral hazard problem
c. To subsidize doctors and hospitals
b. To deal with the moral hazard problem
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When ticket scalpers buy up hundreds of Chicago Cubs tickets the day tickets go on sale, they are
A) behaving unethically. B) hoping to buy high and sell low. C) hoping to buy low and sell high. D) ruining it for everyone else.
A bank with $100 million in deposits has $15 million of cash in the bank, $10 million in deposits with the Fed, and $15 million in government securities in its vault. Its total reserves equal
A) $10 million. B) $15 million. C) $25 million. D) $40 million.
A Japanese recession will be counteracted by an appreciation of the Japanese yen
a. True b. False Indicate whether the statement is true or false
A U.S. Treasury bond dealer with a large portfolio who sells a futures contract for U.S. Treasury bonds is:
A. ensuring the sales price of the bond through hedging. B. taking on additional risk in hopes of getting a larger return. C. not likely to find a buyer for this transaction. D. should see the value of the futures contract increase as bond prices rise.