The market for control of corporations serves to
A) create moral hazard.
B) address the principal-agent problem.
C) add to economies of scale.
D) address the problem of adverse selection.
B
You might also like to view...
Automatic stabilizers are changes in ________ that occur automatically as economic activity changes
A) taxes and transfer payments B) the money supply C) unemployment D) inflation
Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by
A) a price decrease, decreasing the supply and increasing the demand. B) a price increase, increasing the quantity supplied and decreasing the quantity demanded. C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded. D) a price increase, increasing the supply and decreasing the demand.
Which of the following statements about stock-issuing firms is FALSE?
A. Firms that pay dividends cannot lose money for their investors because the stockholders can at least count on the dividend payment every year. B. Firms that issue new stock a second time are making a secondary public offering. C. Firms that issue stock are participating in the equity credit channel. D. Firms that issue stock for the first time do so through an initial public offering, handled by an investment bank.
The concept of the invisible hand was first introduced to economics by:
A. Adam Smith. B. Thomas Malthus. C. Milton Friedman. D. David Ricardo.