Refer to Figure 2-10. In the circular flow diagram, market K represents
A) product markets. B) firms. C) households. D) factor markets.
D
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Insurance companies try to mitigate the problem of adverse selection by:
A. asking potential customers a seemingly endless list of questions to gain as much information as they can about the person's risk characteristics. B. charging a higher premium to groups with similar ages or behaviors that correlate with risky behavior. C. charge a higher price to all individuals to cover the lack of information. D. All of these statements are true.
Which of the following best describes the relationship between economic growth and literacy? a. As the economy grows, literacy declines because it becomes less and less useful in a developed economy
b. Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. c. Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education. d. There is no correlation between economic growth and literacy.
Which of the following is included in GDP?
a. burglar alarm purchases b. crime c. traffic congestion d. income equality
Big-push development projects normally require government funding because private sources are unwilling, and often unable, to support such large projects
Indicate whether the statement is true or false