A Recession Can Best Be Defined as a Period of Time

question 56

Multiple Choice

A recession can best be defined as a period of time in which

• A)total output of the economy falls.
• B)total output of the economy rises very slowly.
• C)total unemployment falls.
• D)total international trade fails to rise.
• E)Both a and c

Recognize principles of Pareto optimality in the context of resource distribution.

Identify and calculate marginal rates of substitution in utility maximization problems.

Understand the conditions for and implications of Pareto efficiency in resource allocation.

Grasp the concept of welfare economics, including the utility possibilities frontier and how it reflects the efficient allocation of resources.

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Definitions:

Salvage

The right of the insurer to the property where the insured is compensated for the loss.

Indemnity

The concept that distinguishes a contract of insurance from a wager.

Utmost Good Faith

A principle of insurance contracts that requires all parties to act honestly and not mislead or withhold critical information from one another.

Insurable Interest

An interest that would result in a loss on the occurrence of the event.