Adverse selection arises in insurance markets because
a. insurance buyers have more information than insurance sellers.
b. insurance sellers have more information than insurance buyers.
c. individuals can select which insurance company to patronize.
d. insurance companies can exercise too much control over whom they insure.
a
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The unemployment rate is measured as
A) the number of people that want to work but cannot find jobs out of the entire population. B) the percentage of people in the labor force who are unemployed. C) an indicator to determine long-term economic growth. D) an indicator for potential inflation.
Using the money demand and money supply model, an increase in money demand would cause the equilibrium interest rate to
A) increase. B) decrease. C) not change. D) increase, then decrease.