Which of the following describes a moral hazard problem?
A) a process by which individuals have substantial resources devoted to the exchange process and need to make a profit or they will be adversely affected
B) a process by which individual buyers or sellers with better information are more likely to participate in voluntary exchange
C) a contractual problem that results because monopolies exist in all economies
D) a post-contractual problem that may result because participants to the exchange process have information that allows them to act in an opportunistic manner
D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Neutral technological progress occurs when
a. higher output levels are achieved with the same quantity and combinations of factor inputs. b. higher output levels are achieved by more capital intensive methods. d. higher output levels are achieved by more labor intensive methods. e. higher output levels are achieved.
On the graph above, suppose the economy is at point F when there is a temporary positive supply shock. The new long-run equilibrium is at point ________
A) H B) I C) F D) G E) none of the above
The Greenbackers' demand to back the greenback issues with gold reserves was not practical in the late 1860s
Indicate whether the statement is true or false