One way of reducing the moral hazard problem in the automobile insurance market is for drivers to
A) carry high deductibles.
B) carry no deductibles.
C) all have good driving records.
D) never make any claims.
A
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Figure 9-1
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In Figure 9-1, the economy is
A. experiencing an inflationary gap, shown by the horizontal distance EB. B. at full employment without inflation. C. experiencing a recessionary gap, shown by the horizontal distance EB. D. experiencing a recessionary gap, shown by the distance between EF.
An increase in the long-run aggregate supply curve indicates that
a. the natural rate of unemployment has increased. b. unemployment has increased. c. the general level of prices has increased. d. potential real GDP has increased.
Using the asset model of short-run exchange rate determination, once the domestic rate of return is determined by MS and MD, the short-run equilibrium ___ can be determined if prices are inflexible and expectations are given.
a. interest rate b. exchange rate c. price level d. income level
Economic growth may understate changes in standards of living if
A. the growth is accompanied by increasing congestion. B. the types of jobs generated feelings of alienation. C. deflation is taking place. D. leisure time is also increasing.