One way to limit the problem of adverse selection in health insurance is to _____
a. investigate fraudulent activity
b. promote competition in health insurance markets
c. charge premiums in proportion to the probability of making claims
d. a and c
c
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The Fed conducts open market operations with the primary goal of
A) affecting the federal funds rate. B) affecting the discount rate. C) stabilizing the foreign-exchange market. D) adjusting reserve requirements.
As the price of a good rises, the consumer will experience
A) a desire to consume a different bundle. B) a decrease in utility. C) a downward or leftward movement on the indifference map. D) All of the above.
In 1976, the cost of a movie was $4. In 2012, it's $9. If the CPI for 1976 is 56, and 228 for 2012, then we could say the cost of a 1976 movie in 2012 would be:
A. $16.29, so the cost of movies has not increased as much as general inflation. B. $16.29, so the cost of movies is relatively more in 2012 than it was in 1976. C. $2.21, so the cost of movies has not increased as much as general inflation. D. $2.21, so the cost of movies is relatively more in 2012 than it was in 1976.
If a single banks faces a required reserve ratio of 20 percent, has total reserves of $500,000 . and checkable deposit liabilities of $400,000 . what is the maximum amount of money this bank could create (add to the money supply)?
a. $420,000 b. $100,000. c. $80,000 d. $2,100,000.