Which of the following is the result of providers having more information about treatment alternatives than their patients do?
a. Adverse selection
b. Externalities
c. Principal-agent problem
d. The substitution effect
e. Rational ignorance
c. Principal-agent problem
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Which of the following is most closely related to the "fair results" approach to fairness?
A) efficient resource use B) having an equal income distribution C) voluntary exchange D) the command system of allocating resources E) price hikes in a natural disaster
A sound policy to combat a temporary liquidity surplus in the banking system would be
A) a reduction in the discount rate. B) a decrease in the discount rate. C) the purchase of government securities by the Fed under a repurchase agreement. D) the sale of government securities by the Fed under a repurchase agreement.
The model of aggregate demand and aggregate supply can NOT be used to:
A. discuss the pros and cons of income tax cuts. B. evaluate a tax cut's effect on short run economic fluctuations. C. assess a tax cut's effect on longer run issues such as the national debt. D. to discuss income distribution.
If actual output equals potential output, unusually slow potential output growth would tend to result in:
A. an output gap. B. a recessionary gap. C. a recession. D. an expansion.