Use a supply and demand diagram to show how health insurance causes an over allocation of resources to health care
Without insurance the market moves to Point A. The equilibrium price is Pa and quantity is Qa. When the health insurance is purchased by an individual demand increases. There is a wedge between the price consumers pay and the price sellers receive. The sellers receive a price of Pb and consumers pay Pc. The difference is paid by the insurance company. The insurance leads to an over allocation of resources, the quantity moves from the efficient point Qa to Qc.
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The broadest measure of the price level that includes all final goods and services is
A) the consumer price index. B) the producer price index. C) the wholesale price index. D) the GDP deflator.
One of the most important and most visible roles of the IMF is to
A) hold regular negotiations over tariff reductions. B) investigate countries that are charged with being unfair traders. C) provide loans to countries that need capital to develop their economies. D) intercede by invitation when countries cannot pay their international debts.