After Hurricane Katrina, there was considerable public outrage that many of the properties were not insured against flooding although they were insured against wind damage. What might explain these different approaches to insurance?
A) The risk of wind damage is potentially diversifiable, but the risk of flooding is not.
B) The risk of flood damage is potentially diversifiable, but the risk of wind damage is not.
C) predatory insurance policies
D) Neither the risk of wind damage nor the risk of flooding is diversifiable.
A
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Moving upward along the short-run aggregate supply curve results in a ________ in the price level and ________ in real GDP
A) rise; an increase B) rise; a decrease C) fall; an increase D) fall; a decrease
The marginal propensity to save (MPS) is computed as the change in:
a. savings divided by the change in saving. b. savings divided by the change in income. c. saving divided by the change in GDP. d. None of these.
List one specific policy that would shift the long-run Phillips curve to the right
Suppose the UK has instituted an expansionary monetary policy to fight unemployment in the economy. The UK has a floating exchange rate.a. If the exchange rate value of the pound remains steady, what are the effects of easy money on British national product and income? What is the effect on the British unemployment rate? Explain.b. Following the monetary expansion, what is the likely pressure on the exchange-rate value of the pound? Explain.c. What are the implications of the change in the exchange-rate value of the pound for British national product and unemployment? Does the change in the exchange rate tend to reinforce or counteract the expansionary thrust of the British monetary policy? Explain.
What will be an ideal response?