The bond supply curve
A) shows the quantity of bonds lenders are willing to supply as bond prices change.
B) shows the quantity of bonds lenders are willing to supply as interest rates change.
C) shows the quantity of bonds borrowers are willing to supply as bond prices change.
D) is represented by a downward-sloping line when the price of bonds is on the vertical axis and the quantity of bonds supplied is on the vertical axis.
C
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Insurers try to minimize moral hazard by
a. only selling policies to individuals with high ethical standards. b. requiring advance payments of premiums. c. charging higher premiums to individuals than to groups. d. charging deductibles and coinsurance. e. refusing to sell insurance to individuals with chronic illnesses.
In a state-run lottery, where winners are paid in annual installments
a. the present value of the payments is less than the number of dollars won b. the future value of the winnings is less than the number of dollars won c. the present value of the payments is greater than the number of dollars won d. the winner would prefer the annual installments to a lump sum payment made immediately e. none of the above is correct