One of the reasons the student loan repayment plan at Yale did not work was because:
A. there was an adverse selection of students into the program.
B. the collective bargaining with the students reached an impasse.
C. complete information was given to both the students and the University.
D. the moral hazard of students made them take riskier jobs.
Answer: A
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For a firm in a perfectly competitive labor market
A) W > MFC. B) W < MFC. C) W > MRP. D) W = MFC.
Actual GDP will be below potential GDP:
a. when the economy is at full employment. b. during an economic boom. c. when resources are fully utilized. d. during a recession.
Suppose a firm in a perfectly competitive market is operating at its profit-maximizing level of output. Will the firm suspend operations if it faces a reduction in the price it can charge for its product?
a. No, because it can always raise its prices in the short run. b. No, because it can always raise its prices in the long run. c. No, as long as the firm earns sufficient revenue to pay all of the variable costs. d. Yes, since it never makes sense to operate at a loss, even in the short run. e. No, because it always makes sense to operate at a loss, even in the long run.
Assume that the interest rate on a federally insured deposit declines from 15 percent per annum to 10 percent. If an individual holding a U.S. Treasury bill worth $2,500 plans to sell it after this drop in interest rate, he would realize (approximately) a:
a. capital gain worth $99. b. capital loss worth $100. c. capital gain worth $100. d. capital loss worth $99.