Which of the following best illustrates moral hazard?
a. After a person obtains life insurance, she takes up skydiving.
b. A person obtains insurance knowing he is in poor health.
c. A person holds stock only in very risky corporations.
d. A person holds stocks from only a few corporations.
a
Economics
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An external benefit is a benefit from a good or service that someone other than the ________ receives
A) seller of the good or service B) government C) foreign sector D) consumer E) market maker
Economics
An increase in the expected future marginal product of capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if firms face borrowing constraints; otherwise, shift down and to the left.
Economics