Moral hazard takes place ______.
a. when a person cannot buy insurance
b. when a person tries to be more cautious
c. before a person becomes insured
d. after a person has bought insurance
d. after a person has bought insurance
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When real GDP exceeds potential GDP, then the economy has
A) an inflationary gap. B) a below-full-employment equilibrium. C) a recessionary gap. D) None of the above answers are correct.
A Nash equilibrium is:
A. an outcome in which all players choose the best strategy they can, given the choices made by all of the other players. B. when one strategy is always the best for a player to choose, regardless of what other players do. C. an outcome in which all players follow a "leader" in order to maximize profits. D. None of these statements is true.
Which of the following is the best way for a student of economics to make sensible judgments about real-world markets and real-world governments?
a. In the real world, government action is always the best way to control markets. b. We must see the strengths and weaknesses of both markets and government. c. Markets’ lack of flexibility must produce unwanted results, such as monopolies and worker oppression. d. Government action is imperfect and does not reflect majority views, so it has no useful role to play in regulating markets.
The major trade group in South America involving Brazil, Paraguay, Uruguay, and Argentina is ________.
A) Mercosur B) UNASUR C) APEC D) CAN