Answer the following questions true (T) or false (F)
1. Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.
2. Vaccinations tend to result in a positive externality.
3. College education tends to result in a negative externality because the recipient does not receive the full benefit of the education.
1. TRUE
2. TRUE
3. FALSE
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Crowding-out is eliminated when the LM curve is ________, so that expansionary fiscal policy ________ the interest rate
A) vertical, does not affect B) vertical, raises C) horizontal, does not affect D) horizontal, raises
Common knowledge in game theory
A) is information known by all players. B) is required for static games. C) does not impact the outcome of the game, since everyone has the information. D) Both A and B.