Venture capital firms attempt to overcome the principal-agent problem by
A) investing only in industries with high profit rates.
B) charging high interest rates on loans.
C) holding large equity stakes in the firms they invest in.
D) avoiding investing in common stock.
C
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What is meant by crowding out? Explain the difference between crowding out in the short run and in the long run
What will be an ideal response?
A rational decision maker takes an action only if the
a. marginal benefit is less than the marginal cost. b. marginal benefit is greater than the marginal cost. c. average benefit is greater than the average cost. d. marginal benefit is greater than both the average cost and the marginal cost.
In a country with a mixed market economy, what actions may government prevent?
a. open competition among car manufacturers b. the addition of dangerous narcotics in children's cough syrup c. a reduction in fuel prices d. the bankruptcy of a small business
If the CPI were fixed, then the fact that it is wrong by 0.8 percentage points means that over a ten year period it is wrong by
A. between 1.1 and 11 percentage points. B. 1.1 percentage points. C. 11 percentage points. D. more than 11 percentage points.