Although debt contracts require less monitoring than equity contracts, debt contracts are still subject to ________ since borrowers have an incentive to take on more risk than the lender would like
A) moral hazard
B) agency theory
C) diversification
D) the "lemons" problem
A
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Assume that there is a proposed tax cut by the U.S. House of Representatives. A problem is
a. how to distribute the benefits of the total tax cut among different groups within the country. b. that the process occurs very quickly without much time to study any negative effects. c. that tax cuts are harder to implement than tax increases. d. that the Federal Reserve has almost invariably been in favor of moderate tax increases rather than tax cuts. e. this statement is wrong, as tax bills originate in the U.S. Senate.
The equilibrium price and quantity are determined according to the intersection of ______.
a. the average total cost curve and the horizontal sum of the short-run marginal cost
curves for the oligopolists
b. the marginal revenue curve and the average total cost curve
c. the marginal revenue curve and the horizontal sum of the short-run marginal cost
curves for the oligopolists
d. the average total cost curve and the demand curve
A corporation is limited to how many owners?
A) 1 B) 2 C) less than 10 D) There is no limit to the number of owners.
In a risk-benefit analysis of pesticide use,
a. benefits are the gains from eliminating or reducing pesticide use b. benefits can be measured as the change in producer and consumer surpluses linked to increasing supply due to enhanced crop yields c. the data needed to estimate benefits are readily obtainable d. secondary benefits, such as improved worker productivity, are not relevant