The two types of trade, intertemporal and pure asset swap ________ perfect substitutes, because ________
A) are; they both offer considerable payoff and are equal in the long run
B) are; they both involve the smoothing out of now and future consumption
C) are not; asset swapping is immediate and involves only assets, while intertemporal trade takes two time periods and involves both assets and goods/services
D) could possibly be; different economic states occur at different points in time
E) are not; asset swapping never relates to intertemporal trade
D
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Adverse selection arises in the health insurance market because ________
A) buyers have private information B) sellers have private information C) different firms provide different insurance schemes D) the number of buyers and sellers is large
The new Keynesians emphasize the importance of
A) rational expectations. B) sticky wages and prices. C) real causes of the business cycle. D) the monetary growth rule.