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When you buy motor insurance the policy will generally stipulate that the policyholder is responsible for the first part of any claim; for example, you might have to pay the first €250 or €1,000 of any claim and the insurance company would pay the rest ans so the amount you would have to pay forms the deductible.
i) Explain how this arrangement help to deal with the problem of moral hazard?
ii) Explain how this arrangement help to deal with the problem of adverse selection?
Explain the difference between active monetary policy and passive monetary policy, commenting on the Federal Reserve's use of monetary policy since the early 1980s.
"The operator of the tunnel that links Britain and France, Eurotunnel, said that commercial and tourist traffic using its car and coach shuttle service had fallen sharply in 2004, leading to a drop in operating revenues of 4%. Eurotunnel's chief e..
The assignment question economics, particularly to macroeconomics and it is explain about how the concepts of demand and supply interact and arrive at equilibrium prices of perishables such as fruits and vegetables.
A monopoly firm is different from a competitive firm in that there are many substitutes for a monopolist's product while there are no substitutes for a competitive firm's product or else.
If neither company adopts the side impact airbag technology, each company will earn $0.5 billion (due to lost sales to other automakers). If one company adopts the technology as standard equipment and the other does not, the adopting company will ear..
An accident has occurred in which chemicals leaked into the ground water nearby, the community is unaware. Assess the costs involved in cleaning up the water immediately (confessing) versus hiding the fact.
You operate a delivery service in your local area, but you are thinking of expanding to another market. You're concerned that you might need to set different prices in the new market because the cost of gas might be much different.
Consider a purely probabilistic game that you have the opportunity to play. Each time you play there are n potential known outcomes x1, x2, ..., xn (each of which is a specified gain or loss of dollars according to whether xi is positive or negati..
1. What is the difference between gross domestic product (GDP) and gross national product (GNP)? 2. Based on the table, what calculations must you make to determine GNP from GDP? 3. What is national income (NI)? 4. Which was higher in this year, GNP ..
Utilizing the supply and demand model, explain what would happen to the supply curve during a drought. Also explain the affect on the price of water.
Illustrate what are some obstacles to successful international economic policy coordination in terms of current global economic and political policies and their impact on business decisions.
Production procedures elucidate the law of increasing opportunity costs.
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