Author Question: In the market for insurance A) sellers are protected from lawsuits brought by buyers. B) demand ... (Read 206 times)

MirandaLo · **on:** Jun 29, 2018

In the market for insurance

A) sellers are protected from lawsuits brought by buyers.
B) demand is perfectly inelastic because, by law, home owners and automobile drivers must have insurance.
C) sellers often have better information than buyers.
D) buyers often have more information than sellers.

Question 2

Describe three types of short-run macroeconomic equilibrium.

What will be an ideal response?

meryzewe · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

Short-run macroeconomic equilibrium occurs when the quantity of real GDP demanded equals the quantity of real GDP supplied. There are three types of short-run equilibrium: below full-employment equilibrium where a recessionary gap exists with real GDP less than potential GDP; above full-employment equilibrium where an inflationary gap exists with real GDP greater than potential GDP; full-employment equilibrium where no gap exists and real GDP equals potential GDP.