A jury award that wildly overstates non-monetary losses can harm the economy primarily because it
A. still fails to adequately compensate the injured party for all damages.
B. takes from the rich and gives to the poor.
C. causes overly-cautious buyers and sellers to avoid mutually-beneficial transactions.
D. enriches greedy plaintiff's lawyers.
Answer: C
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What is meant by the term "rational ignorance"?
A) It refers to the fact that policymakers and their constituents have different ideas of what it means to behave rationally and each party deliberately ignores the other's view. B) It refers to the absence of a negative incentive, such as levying a fine for not voting, which results in low voter turnout. C) It refers to a situation where one policymaker deliberately approves legislation he does not support in exchange for a future favorable vote for his own cause. D) It means the lack of an economic incentive for voters to become informed about a pending vote.
What happens in the short run in the Keynesian model to the exchange rate and net exports in each of the following cases?
(a) The foreign real interest rate falls. (b) Foreign output rises. (c) Foreign demand for domestic goods rises. (d) Domestic output rises. (e) The domestic real interest rate falls.