The principal-agent problem that exists for bank trading activities can be reduced through
A) creation of internal controls that combine trading activities with bookkeeping.
B) creation of internal controls that separate trading activities from bookkeeping.
C) elimination of regulation of banking.
D) elimination of internal controls.
B
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In the long run, a higher government deficit does not affect equilibrium real Gross Domestic Product (GDP), so that continuous increases in the government deficit will
A) lead to greater tax revenues. B) reduce spending on privately provided goods and services. C) reduce the price level. D) increase the unemployment rate.
When psychologists refer to the "Paradox of Choice", what do they mean?
a. More choices may lead people to avoid the decision all together. b. More choices always make people at least as well off (related to the option value principle). c. Risk-averse people sometimes prefer risk because of the thrill it provides. d. If two people with free will make simultaneous decisions, these may sometimes conflict.
As the opportunity cost of holding money decreases, the quantity demanded of money
A) increases. B) decreases. C) remains unchanged. D) increases, then decreases. E) decreases, then increases.
Consider two restaurants located next door to each other: Quick Burger and The Sunshine Café. If Quick Burger opens a drive-through window, the increased traffic and noise will bother customers seated outside at The Sunshine Café. The table below shows the monthly payoffs to Quick Burger and The Sunshine Café when Quick Burger does and does not operate a drive-through window. Quick Burger Operates aDrive-Through WindowQuick Burger Does NotOperate Drive-Through WindowQuick Burger$24,000$15,000The Sunshine Café$11,000$23,000If Quick Burger has the legal right to operate a drive-through window, then the Sunshine Café would be willing to pay Quick Burger as much as ________ per month to NOT operate a drive-through window.
A. $12,000 B. $11,000 C. $15,000 D. $9,000