An example of permanent insurance is ________ insurance, and an example of temporary insurance is ________ insurance

The output gap is the

A) difference in graduation levels between high school and college. B) difference between actual inflation and core inflation. C) percentage deviation of real GDP from potential GDP. D) percentage increase in the growth rate of real GDP. E) percentage increase in the growth rate of real GDP minus the unemployment rate.

Adverse selection is a problem associated with equity and debt contracts arising from

A) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities. B) the lender's inability to legally require sufficient collateral to cover a 100% loss if the borrower defaults. C) the borrower's lack of incentive to seek a loan for highly risky investments. D) the lender's inability to restrict the borrower from changing his behavior once given a loan.