Empirically, the relationship between CEO performance (measured in terms of share price) and CEO compensation is
A. large and positive.
B. large and negative.
C. small and negative.
D. nonexistent.
E. small and positive.
Answer: E
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An increase in U.S. prices relative to Japanese prices will
A) decrease both U.S. exports and imports. B) increase total planned spending on U.S. goods and services. C) increase U.S. imports and decrease U.S. exports. D) decrease U.S. imports and increase U.S. exports.
The _____ phase of the business cycle ends at the peak.
Fill in the blank(s) with the appropriate word(s).
If the change in business inventories is zero, then final sales are
A. equal to GDP. B. greater than GDP. C. zero. D. less than GDP.
Peter's Pencils is a perfectly competitive company producing pencils. Suppose Peter is producing 1,000 pencils an hour. If the total cost of 1,000 pencils is $500, the market price per pencil is $2, and the marginal cost is $2, then Peter
A) makes an economic profit because marginal revenue is equal to marginal cost at this output level. B) should decrease his output to increase his profit. C) is maximizing his profit and is making an economic profit. D) should increase his output to increase his profit. E) is not maximizing his profit but is making zero economic profit anyway.