When people who buy insurance change their behavior after the purchase because they are protected from loss by the insurance, the insurance market is said to face the problem of
A) economic irrationality. B) asymmetric information.
C) adverse selection. D) moral hazard.
D
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Economists of the rational expectations school believe that expansionary monetary policy is fully effective only if: a. the policy is anticipated by workers and firms
b. it causes the aggregate supply curve to shift to the left. c. the economy is operating at or above its potential output level. d. policy makers follow through on their previously announced plans. e. the policy is totally unexpected.
Successful export-led growth policy entails:
A. choosing the "right" industries to invest in. B. blocking the "right" industries from importing to domestic markets. C. choosing the "right" incentives to encourage exports. D. choosing the "right" disincentives to reduce imports.
The term "deadweight loss" or "excess burden" is used to describe the
a. expenditures on exercise and weight-reducing programs by individuals who are overweight. b. loss from the elimination of mutually beneficial exchanges that results from the imposition of a tax in a market. c. difference between the value consumers place on a good and the price they have to pay for it. d. reduction in consumer welfare that occurs when the firms in a market make a profit.
In the U.S., each additional year of schooling has historically raised a person's wage on average by about
a. 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. b. 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. c. 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger. d. 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.