Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?
A) When all group members pay the premium, the problem of adverse selection is reduced.
B) The characteristics of a large group are likely to reflect those of the entire population.
C) When all group members pay the premium, the problem of moral hazard is reduced.
D) It is easier to accurately predict the number of claims for a group than for an individual.
C
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The classically-based models (classical, new classical, monetarist, real business cycle) all agree that
a. markets always clear. b. monetary policy can affect output in the short-run but not the long-run. c. changes in aggregate drive most changes in output. d. stabilization policy is ineffective. e. None of the above
An economist would describe college fees as
a. an investment in human capital. b. a transfer payment. c. a waste of parents' money. d. an economic loss.