Employees at the hospital have negotiated a 3 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 5 percent over the next year, which of the following will occur?
A) Real wages for hospital employees will fall. B) The increase in inflation is expected.
C) Inflation will be 3 percent the following year. D) Unemployment of hospital employees will rise.
A
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An inherent weakness of ________ is the absence of the profit incentive
A) government-directed credit B) government-backed deposit insurance C) private loans D) prudential supervision
Compared to the case in which a monopoly insurer offers the consumer a contract, if insurance is competitively provided:
a. any moral hazard or adverse-selection problem is alleviated. b. any moral hazard or adverse-selection problem is worsened. c. the essence of any moral hazard or adverse-selection problem would not change much. d. insurers would no longer offer menus of contracts.