Suppose a plaintiff hires a lawyer to represent her in a court case. Under which of the following contracts is efficiency in risk bearing assured?
A) The lawyer is paid by the hour.
B) The lawyer receives a share of the settlement.
C) The lawyer receives a fixed fee.
D) It is impossible to determine without the degree of risk aversion for each.
D
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For a given level of equilibrium GDP, a tight-money/easy-fiscal policy mix compared with easy-money/tight-fiscal policy mix implies a
A) lower interest rate. B) lower level of investment. C) higher level of taxation. D) lower level of government expenditures.
Each of the following is a provision of the 1996 welfare reform law except that
A. lifetime welfare benefits would be limited to five years. B. each state receives a lump sum to run its own welfare and work programs. C. any adult found guilty of a felony would be removed from the welfare rolls. D. future legal immigrants are banned from welfare assistance.
Which statement is true?
A. Entrepreneurial ability is abundant in the U.S. B. The entrepreneur sets up a business and risks his or her own money. C. Land, labor and capital may be considered passive resources. D. All of the statements are true.
The demand for loanable funds is downsloping:
A. because businesses find that more investments are profitable at low interest rates than at high interest rates. B. because households are willing to save more at high interest rates than at low interest rates. C. only when the nominal interest rate exceeds the real interest rate. D. because the amount of profitable business investment varies directly with the interest rate.