Rational expectations theory predicts that people's expectations of higher inflation will adjust immediately, leading to an immediate decrease in the actual inflation rate
a. True
b. False
Indicate whether the statement is true or false
False
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Assume health insurance is provided universally by the government. This would
A) force every taxpayer to bear the costs of adverse selection. B) force every taxpayer to bear the costs of moral hazard. C) force the government to deal with adverse selection problems. D) force foreign governments to deal with moral hazard problems.
A rightward shift of the investment demand curve could be caused by:
a. a technological advance. b. optimism about long-term growth. c. forecasts of favorable business conditions. d. an increase in confidence in short-run economic conditions. e. any of these.
The desire of a consumer to purchase one more unit of a product is known as ______.
a. marginal production cost b. marginal willingness to pay c. deadweight loss d. producer surplus
Price discrimination works best when
A. Buyers have information about prices charged to different customers. B. Sellers cannot meet collectively. C. A product is purchased frequently by consumers. D. Buyers do not have perfect information about the price.