The problem of adverse selection in insurance results in a situation in which
A) people choose inappropriate or inadequate coverage because they do not understand the complex information in the policies.
B) people choose too much coverage because they do not understand the complex information in the policies.
C) people choose too little coverage because they do not understand the complex information in the policies.
D) unhealthy people become more likely to buy insurance than healthy people, which drives premiums up, which drives even more healthy people away from the market.
E) healthy people become more likely to buy insurance than unhealthy people, which drives premiums up, which drives even more unhealthy people away from the market even though they are the ones who need it most.
D
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Between 1981 and 2012, the United States
A) had a current account surplus almost every year. B) some years had a deficit and some years had a surplus that totaled a surplus of $2.5 trillion. C) had a current account surplus or deficit that almost equal to $0 every year. D) had a current account deficit almost every year. E) some years had a deficit and some years had a surplus that netted out to $0.
Ignoring any supply-side effects, if government expenditure on goods and services decrease by $10 billion and taxes decrease by $10 billion, then real GDP ________ and the price level ________
A) increases; falls B) decreases; falls C) does not change; does not change D) increases; rises E) decreases; rises