The case where people purposely act in a careless way, for example, driving recklessly because they are insured, is called
A) asymmetric information.
B) risk aversion.
C) moral hazard.
D) bounded rationality.
E) thrill-seeking.
C
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When the price level falls
A) imports increase, and exports decrease, which causes a movement up along the aggregate demand curve. B) there is no impact on imports or exports, so there is no associated movement along the aggregate demand curve. C) imports decrease and exports increase, which cause a movement down along the aggregate demand curve. D) imports decrease and exports increase, which cause a movement up along the aggregate demand curve.
When new goods are introduced, consumers have more variety from which to choose. As a result, each dollar is worth
a. more, and the cost of living increases. b. more, and the cost of living decreases. c. less, and the cost of living increases. d. less, and the cost of living decreases.