If all actions are known to all then there is
A) a focused economy.
B) a negative externality.
C) transparency.
D) a dictatorship.
C
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The short-run aggregate supply curve is a relationship between
A) real GDP and price level. B) capital goods and consumer goods. C) unemployment and real GDP. D) inflation and time.
Describe what is meant by economies of scope and explain how financial institutions' realizing economies of scope has led to an increase in conflicts of interest
What will be an ideal response?
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.
The reason externalities distort the allocation of resources is that:
a. too few goods are usually produced. b. firms often go out of business because of the externality. c. a firm's private costs do not reflect the social cost of production. d. regulating externalities uses scarce resources.