One way the venture capital firm avoids the free-rider problem is by
A) prohibiting the sale of equity in the firm to anyone except the venture capital firm.
B) prohibiting members from serving on the board of directors.
C) prohibiting the borrowing firm from replacing management.
D) requiring collateral equal to the value of the borrowed funds.
A
You might also like to view...
The demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore,
A) sellers bear most of the incidence of a tax on gasoline. B) buyers bear most of the incidence of a tax on gasoline. C) the government bears most of the incidence of a tax on gasoline. D) the incidence of a tax on gasoline depends if the tax is imposed on sellers or on buyers. E) None of the above answers is correct.
The short-run aggregate supply curve: a. has the same slope as the LRAS
b. shifts only when the LRAS shifts in the same direction. c. normally slopes upward to the right because the costs of labor and other inputs are relatively fixed in the short run. d. normally has a slope of zero, meaning the curve is horizontal.
Which is not a reason Usury laws are often politically popular?
A. Few people sympathize with banks and other lenders who are suspected of price gouging. B. Consumers are in favor of the lower lending rates. C. The lower rates allow people to borrow more. D. Lenders, not the Usury laws, are often blamed by people who do not get loans.
Automatic stabilizers are government programs that:
A. exaggerate the ups and downs in aggregate demand without legislative action. B. bring expenditures and revenues automatically into balance without legislative action. C. shift the budget toward a deficit when the economy slows but shift it toward a surplus during an expansion. D. increase tax collections automatically during a recession.