More of Society's Resources Will Be Channeled into Capital When

question 66

Multiple Choice

More of society's resources will be channeled into capital when

• A)interest rates are high
• B)households decide to save less of their income
• C)businesspeople have optimistic expectations about the future
• D)corporate income taxes increase
• E)aggregate income decreases

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Definitions:

Incompetent

Lacking the necessary skills, qualities, or ability to effectively perform a specific job or task.

Moral Hazard

The risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.

Walk-Throughs

Detailed guides or inspections usually performed to assess, explain, or demonstrate procedures or how a series of steps is to be followed.

Adverse Selection

A situation where asymmetric information results in high-risk individuals being more likely to participate in an exchange, leading to a market failure.