Author Question: The difference between moral hazard and adverse selection is a. moral hazard has to do with ... (Read 287 times)

justinmsk · **on:** Jul 1, 2018

The difference between moral hazard and adverse selection is
a. moral hazard has to do with unobservable characteristics of individuals
b. moral hazard has to do with unobservable actions of individuals
c. adverse selection is when individuals change their behaviors because of a contract
d. adverse selection is when you choose the wrong answer on a test

Question 2

The invisible hand using Adam Smith's terminology refers to
a. government control of the market.
b. market forces working through the price mechanism.
c. the money supply that serves to keep the economy working smoothly.
d. the role of innovation in maintaining a steady rate of growth.
e. behind-the-scenes policy making to influence how markets allocate scarce resources.