In a public corporation, asymmetric information often results in a principal-agent problem between top management and ownership. What information would help to prevent this principal-agent problem?
What will be an ideal response?
Top managers know more about how the company is run than do the firm's shareholders. The principal-agent problem might be overcome if shareholders had all the information about the company and about the consequences of the actions taken by the firm's managers that the managers themselves possess.
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Which of the following is not a responsibility of the Fed?
A) supervising member banks B) serving as the lender of last resort C) determining the level of government spending D) providing check-clearing services E) supplying the economy with Federal Reserve Notes
If the rate of exchange for a pound of $4, the rate of exchange for the dollar is _____ pound.
Fill in the blank(s) with the appropriate word(s).
The relationship between the MPS and the MPC is such that:
A. MPC - MPS = 1 B. MPS/MPC = 1 C. 1 - MPC = MPS D. MPC - 1 = MPS
Which of the following will most likely increase aggregate demand?
a. A decrease in stock market prices. b. An increase in business investment spending. c. A decrease in the expected inflation rate. d. A decrease in real GDP.