Each member in a group might do what's best for himself or herself instead of behaving in a way that optimizes the well-being of the entire grou
A) irrational behavior. B) free riding.
C) Pareto inefficiency. D) disequilibrium.
B
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If the Federal Reserve wants to increase the money supply, it should:
A. increase reserve requirements. B. increase the interest that it pays on reserves. C. increase the discount rate. D. conduct open-market purchases.
Based on the figure above, the aggregate supply curve shifts rightward and the potential GDP line does not change when
A) the money wage rate rises. B) the price level rises. C) the money wage rate falls. D) the price level falls. E) both the price level and money wage rate rise by the same proportion.
The basic idea behind moral hazard is that ________
A) some economic transactions impose an additional cost on society B) some economic transactions give rise to an additional benefit to society C) people tend to take more risks if they do not have to bear the costs of their behavior D) people do not reveal their true preference for goods that are non-excludable in consumption
Which types of investment accounts are investors likely to choose if they are trying to minimize risk? Why?
What will be an ideal response?