An increase in the marginal benefit arising from a specialized investment will cause the optimal contract length to:
A. increase.
B. decrease.
C. either increase or decrease.
D. remain constant.
Answer: A
You might also like to view...
What is the main difference between an instrument rule and a targeting rule? Be sure to define each
What will be an ideal response?
If frictional unemployment increased, but structural unemployment decreased by more, the natural rate of unemployment:
a. Would increase b. Would not change c. Would decrease d. Would be affected in an unpredictable manner
One advantage of a money system compared to a barter system is that
a. barter never works. b. money creates the need for banks. c. money is more efficient. d. everyone has money.
A period of time against which costs of the market basket in other periods will be compared in computing a price index is called
A. the inflation period. B. the market basket. C. the adjustment period. D. the base period.