Automatic stabilizers in the economy include which of the following?
i. A progressive personal income tax.
ii. Unemployment benefit/allowance.
iii. Government action that increases tax rates.
(a) i only.
(b) i, ii and iii.
(c) iii only.
(d) i and ii only.
Answer: (d) i and ii only.
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To reduce the principal-agent problem,
A) managers can take on more risk than they disclose to investors. B) managers can inflate profits on financial statements. C) boards-of-directors can tie the salaries of top management to the profitability of the firm. D) managers can hide liabilities by not disclosing them on financial statements.
The mangers of Happy Campers and Camp with Us are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?
A) an announcement made by either firm regarding their future plans B) the Pareto criterion C) bargaining D) a focal point
Marginal external cost equals marginal private cost minus marginal social cost
a. True b. False
An example of a capability considered in the capabilities approach would be:
A. being able to afford appropriate healthcare required for a healthy life. B. to have adequate food and shelter. C. to be able to afford to travel freely. D. to have the ability to purchase a luxury item you really want.