With increased specialization in the economy, principal-agent problems become
a. more numerous
b. less numerous
c. more severe, but there are fewer of them
d. less severe, but there are more of them
e. easier to solve
A
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The increase in government spending on unemployment insurance payments to workers who lost their jobs during a recession and the decrease in government spending on unemployment insurance payments to workers during an expansion are examples of
A) discretionary fiscal policy. B) discretionary monetary policy. C) automatic stabilizers. D) automatic monetary policy.
An increase in government expenditure on goods and services
A) increases aggregate demand. B) increases the aggregate quantity demanded. C) decreases the aggregate quantity demanded. D) decreases aggregate demand.
With barriers to the entry of new firms
A) a cartel is guaranteed to earn an economic profit greater than zero. B) a cartel's members have no incentive to cheat. C) the cartel will likely earn an economic profit greater than zero. D) industry supply will expand if the firms form a cartel.
If interest rates and output rises, then
a. government spending may have fallen. b. the money supply may have risen. c. taxes may have risen. d. expectations may have risen. e. none of the above.