A potential problem arises in principal-agent relationships
a. because the agents and the principals have identical goals
b. because the principals may want to minimize his profits, while the agent may want to maximize them
c. because the agents may have different goals from the principals
d. the goals of principals and agents are irrelevant
c
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Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
A) U.S. imports of goods and services. B) U.S. exports of goods and services. C) U.S. consumption goods and services. D) foreign capital goods. E) U.S. government goods and services.
The state of Georgia offers free college tuition to high school students with a "B" average. In 2007, the state raised the requirement so that fewer students qualified for the scholarship
At the same time, Georgia increased state spending on health care. Suppose that college education is on the vertical axis and health care is on the horizontal axis of a PPF. These changes A) are example of a tradeoff. B) are an example of incentives. C) will cause a shift out of the PPF. D) will cause a shift in the of the PPF.
Which of the following is a result of government price controls?
A) Some people win and some people lose. B) The deadweight loss from price ceilings is greater than the deadweight loss from price floors. C) Price controls increase economic efficiency. D) Price controls benefit poor consumers but harm producers and wealthy consumers.
What happened to the risk premium on Baa corporate bonds during the Financial Crisis of 2007-2009?
A) it declined slightly B) it rose to about 2% C) it rose to about 4% D) it rose to about 6%