Which of the following statements is true?
A. Adverse selection is a problem that occurs after a transaction.
B. Both adverse selection and moral hazard occur before a transaction.
C. Moral hazard is a problem that occurs before a transaction.
D. Adverse selection is a problem stemming from asymmetric information.
Answer: D
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The sticky-price theory of the short-run aggregate supply curve says that when the price level is higher than expected, some firms will have
a. higher than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. b. higher than desired prices, which leads to a decrease in the aggregate quantity of goods and service supplied. c. lower than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied. d. lower than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied
Studies have shown that the tit-for-tat strategy is ineffective at maintaining a price fixing agreement.
Answer the following statement true (T) or false (F)
Explain what is meant by an appreciation and depreciation of the dollar. What does it mean if the dollar price of a Swiss franc (SF) decreases from $0.80 = 1 SF to $0.70 = 1 SF? What does it mean if the dollar price of a Swiss franc increased from $0.70 = 1 SF to $0.80 = 1 SF?
What will be an ideal response?
Refer to the figures. Which figure(s) represent(s) a situation where negative demand shocks can result in a recession?
A. A only.
B. B only.
C. Both A and B.
D. Neither A nor B.