The Phillips Curve shows the trade-off between

Which of the following describes a moral hazard problem?

A) a process by which individuals have substantial resources devoted to the exchange process and need to make a profit or they will be adversely affected B) a process by which individual buyers or sellers with better information are more likely to participate in voluntary exchange C) a contractual problem that results because monopolies exist in all economies D) a post-contractual problem that may result because participants to the exchange process have information that allows them to act in an opportunistic manner

The Federal Reserve plays a larger role than Congress and the president in stabilizing the economy because

A) the Federal Reserve can more quickly change monetary policy than the president and the Congress can change fiscal policy. B) changes in interest rates have their full effect on the economy in a short period of time, whereas changes in government spending and taxes have their full effect over a long period of time. C) the Federal Reserve can immediately recognize when real GDP is below or above potential GDP. D) changes in interest rates have a considerably larger effect on the economy than changes in government purchases or taxes.