In the presence of asymmetric information, a contingent contract
A) achieves production efficiency.
B) can lead to opportunistic behavior on the part of the agent.
C) is impossible to write.
D) will result in the principal earning all of the profit.
B
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The demand for loanable funds includes demand for
i. loans. ii. stocks. iii. bonds. A) ii and iii B) i and ii C) i, ii and iii D) iii only E) i only
The branch of economics which studies the behavior of entire economies is called
A) public economics. B) macroeconomics. C) microeconomics. D) normative economics.
An easier monetary policy ________ the user cost of capital, which ________ net investment
A) raises, raises B) raises, lowers C) lowers, raises D) lowers, lowers
Which of the following statements is correct?
A. The value of the independent variable is determined by the value of the dependent variable. B. The value of the dependent variable is determined by the value of the independent variable. C. The dependent variable designates the "cause" and the independent variable the "effect." D. Dependent variables graph as upsloping lines; independent variables graph as downsloping lines.