The difference between moral hazard and adverse selection is
a. moral hazard has to do with unobservable characteristics of individuals
b. moral hazard has to do with unobservable actions of individuals
c. adverse selection is when individuals change their behaviors because of a contract
d. adverse selection is when you choose the wrong answer on a test
b
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What important lesson did American economists learn in the 1980s and again in 2001–2003?
A. Large tax cuts can lead to a balance of trade surplus. B. Large government budget deficits can crowd out consumption. C. Large government budget deficits can bankrupt the nation. D. Large government budget deficits can crowd out net exports.
To decide whether Yi = ?0 + ?1X + ui or ln(Yi) = ?0 + ?1X + ui fits the data better, you cannot consult the regression R2 because
A) ln(Y) may be negative for 0
Which of the following statements is false?
a. Economists look at the factors that lead an individual to decide that a particular idea is in his or her best interest. b. Economists do not ask whether a particular decision is in the individual's best interest. c. Choices must be made because of scarcity. d. A particular choice is made by an individual because that choice provides the greatest satisfaction. e. None of these statements is false, they are all true.
When a U.S. firm engages in outsourcing, it benefits ________ and harms ________.
A. the U.S. consumers of the firm's products; the firm's foreign employees B. the firm; the U.S. consumers of the firm's products C. the U.S. consumers of the firm's products; the firm's U.S. employees D. the U.S. consumers of the firm's products; the firm