People who are the most willing to pay high interest rates for loans may have bad credit ratings. This is an example of:
A. moral hazard.
B. an experience rating.
C. adverse selection.
D. a negative spillover.
Answer: C
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Checks are NOT money because they
A) are issued by banks, not by the government. B) are merely instructions to transfer money. C) have value in exchange but little intrinsic value. D) are not backed by either gold or silver.
What are the five main economic goals of the United States?
What will be an ideal response?
A depreciation in the value of the U.S. dollar would:
a. encourage foreigners to travel on American owned airlines. b. make U.S. goods more expensive to foreign consumers. c. decrease the number of dollars it takes to buy a Swiss franc. d. make it more expensive for U.S. citizens to travel abroad.
Suppose the multiplier effect for Japan is 0.8 for any $1 billion change in U.S. government purchases. Therefore, Japanese real GDP will rise by $8 billion when U.S. government spending rises by $10 billion
a. True b. False Indicate whether the statement is true or false