If insurance companies are able to gather more and better information on their customers, this will
A) help reduce the problem of adverse selection but do nothing to help with the problem of moral hazard.
B) help reduce the problem of moral hazard but do nothing to help with the problem of adverse selection.
C) help reduce the problems of adverse selection and moral hazard.
D) do nothing to help with the problems of moral hazard and adverse selection.
C
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If the economy is in a long-run equilibrium when the Federal Reserve decides that its inflation target is too low and chooses to raise it, ________
A) it would likely conduct a tightening of monetary policy by raising the real interest rate for any given inflation rate B) it would likely conduct an easing of monetary policy by lowering the real interest rate for any given inflation rate C) it would likely conduct an easing of monetary policy where the real interest rate would increase due to the ensuing decrease in aggregate demand D) it would likely conduct a tightening of monetary policy where the real interest rate would increase due to the ensuing increase in aggregate demand E) none of the above
What does an efficient payment scheme in a principal/agent relationship depend on?
In terms of efficiency, any point on a production possibilities frontier is as good another
a. True b. False Indicate whether the statement is true or false
In the real world, it is likely that wage negotiations:
A. often end with the worker's enjoying a larger payoff, since they are not losing as much in profit as the company. B. often end with the company enjoying a larger payoff, since they can afford to be more patient. C. do not drag on for years. D. drag on for years to see which side is more patient.