Suppose a blackjack gambler approaches an insurance company and seeks to purchase an insurance policy that his next trip to Reno, NV will not net $10,000. The insurance company
A) will sell her an insurance policy because the proposal entails uncertainty not risk.
B) will sell her an insurance policy because the proposal entails risk not uncertainty.
C) will not sell her an insurance policy because the proposal entails uncertainty not risk.
D) will not sell her an insurance policy because the proposal entails risk not uncertainty.
C
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When demand for money is unstable,
A) a constant interest-rate policy will be superior to a policy of constant money-supply growth. B) constant money-supply growth will be superior to a countercyclical monetary policy. C) procyclical monetary policy would be needed to keep the interest rate constant. D) Both A and C are correct.
A higher rate of saving should lead to
A) higher current consumption. B) less growth. C) more investment, higher capital growth, and more future consumption. D) a higher price level and reduced future consumption.