What are the problems associated with the sale of human ...

[nautica902]

What are the problems associated with the sale of human organs?

Question 2

Why are interest rates adjusted for inflation?

[parker125]

Answer to Question 1

There are several problems with the sale of human organs. First, there may be an asymmetric information problem. When people receive money for their organs, they might hide adverse information about their health history. Second, there is the equity issue of allocating human organs on the basis of willingness to pay. Third, it is also likely to increase heath care spending as patients and insurance companies would have to pay a higher price.

Answer to Question 2

Interest is not the price of money but is instead the price of early availability. If inflation is anticipated, interest rates on money loans will adjust to ensure that lenders are paid back the actual purchasing power of the funds loaned.