Incentives can be used to reduce both adverse selection and moral hazard.
Answer the following statement true (T) or false (F)
True
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Market failure happens when a market does not generate the most efficient outcome
Indicate whether the statement is true or false
In the above figure, the equilibrium level of real GDP per year is
A) $1.0 trillion. B) $3.0 trillion. C) $2.0 trillion. D) $4.0 trillion.
If penalties are imposed only on buyers (but not on sellers) of marijuana, the equilibrium price of marijuana ________, and the equilibrium quantity of marijuana sold ________
A) rise; increase B) rise; decrease C) fall; increase D) fall; decrease
If the price level in the United States decreases, domestic goods will become relatively cheaper than foreign goods, the demand for U.S.-made goods will increase, and the quantity of RGDP demanded will increase
a. True b. False Indicate whether the statement is true or false