When an American buys stock in a French company, from the perspective of the United States, this is a(n):
A. export.
B. capital inflow.
C. import.
D. capital outflow.
Answer: D
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A price maker is
A) a consumer who participates in an auction where she announces her willingness to pay for a product. B) a firm that is able to sell any quantity at the highest possible price. C) a person who actively seeks out the best price for a product that he or she wishes to buy. D) a firm that has some control over the price of the product it sells.
High net worth helps to diminish the problem of moral hazard problem by
A) requiring the state to verify the debt contract. B) collateralizing the debt contract. C) making the debt contract incentive compatible. D) giving the debt contract characteristics of equity contracts.
According to Elinor Ostrom's view of The Tragedy of the Commons:
a. The only way to prevent the collapse of the commons is government intervention. b. The only way to prevent the collapse of the commons is to privatize the commons so that it is owned by a single individual. c. Individuals will create institutions to prevent the collapse of the commons. d. Individuals will use the commons beyond the socially efficient point.
Game theory assumes rational behavior on the part of the players
Indicate whether the statement is true or false