You are on a vacation in a foreign country. Because it is your ...

[drink]

You are on a vacation in a foreign country. Because it is your first visit to the country, you do not know much about the tourist spots. So you decide to ask the manager of the hotel regarding the popular tourist places.
 
  He tells you that there is a waterfall and a beautiful park close to the hotel that you can visit. You are wondering which place to go to when you overhear some of the tourists planning a trek to one of the falls. You decide to join them. This is an example of a(n) ________. A) moral hazard
  B) adverse selection
  C) pecuniary externality
  D) information cascade

Question 2

Sustained economic growth generally occurs when a nation
 
  A) abandons the market system in favor of central economic planning.
  B) abandons the rule of law in favor of a series of licenses, regulations, and tariffs to control and protect the domestic economy.
  C) subsidizes loss-generating enterprises and thereby preserves jobs and incomes.
  D) creates conditions where people are free to specialize and exchange.

[Cheesycrackers]

Answer to Question 1

D

Answer to Question 2

D