When insurance causes people to take more risks, this is called
A. defective telescopic faculty.
B. adverse selection.
C. asymmetric information.
D. moral hazard.
Answer: D
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The problem of scarcity
A. has been “cooked up” by disenchanted anticapitalists. B. exists because resources are limited relative to wants. C. is solved by promoting economic growth. D. is caused by artificially high prices.
What are the flows in the market economy that go from firms to households and the flows from households to firms?
What will be an ideal response?
Change in Demand
What will be an ideal response?
Refer to the information provided in Figure 27.2 below to answer the question(s) that follow.
Figure 27.2Refer to Figure 27.2. The output multiplier is smallest when the aggregate demand curve shifts from
A. AD1 to AD2. B. AD3 to AD4. C. AD5 to AD6. D. The output multiplier is the same for all AD curve shifts shown in the figure.