By holding insurance a person
a. reduces the risk of a bad outcome, such as their house burning down.
b. shares risk and so reduces the burden of risk.
c. Both A and B are correct.
d. Neither A nor B are correct.
b
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What will the investment schedule look like if equilibrium output is $500 billion, spending multiplier is 5, and the government increases purchases by $10 billion. If new equilibrium output increases to $530 billion, the planned investment schedule most likely looks like:
A) down sloping and curved B) vertical C) horizontal D) upward sloping and curved
If the Chinese government sets a price ceiling below the equilibrium price, the result will be to
A) increase total surplus. B) create deadweight loss. C) increase surplus and create deadweight loss. D) eliminate deadweight loss.
Large in-kind benefits tend to increase the incentive to seek employment.
Answer the following statement true (T) or false (F)
Expected real interest rates are the
A) interest rates quoted in the market plus the expected inflation rate. B) interest rates quoted in the market. C) expectations of future interest rates. D) interest rates quoted in the market minus the expected inflation rate.