A Major Implication of Asymmetric Information Is That

question 248

Multiple Choice

A major implication of asymmetric information is that

• A)health care suppliers may reduce the supply of health care.
• B)health care suppliers may increase the demand for health care.
• C)collusion between health care suppliers and purchasers may accelerate the rise in costs.
• D)resources may be underallocated to the health care industry.

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Definitions:

Unemployment Tax Rate

A tax rate assigned to an employer, based on the number of unemployment claims filed by former employees, which funds unemployment compensation programs.

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Gross Payroll

The total amount an employer pays to its employees before deductions, such as taxes and retirement contributions, are made.

Federal Unemployment Compensation Tax

A federal tax imposed on employers to fund state workforce agencies and unemployment insurance.