Equity contracts
A) are claims to a share in the profits and assets of a business.
B) have the advantage over debt contracts of a lower costly state verification.
C) are used much more frequently to raise capital than are debt contracts.
D) are not subject to the moral hazard problem.
A
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If all firms pay an efficiency wage, then
A) there is no cost to shirking because the shirking worker can receive his high wage at another firm after being caught and fired. B) the macroeconomy would enjoy a prolonged period of near-zero unemployment. C) there is a cost to shirking because the efficiency wage is less than it would have been if only a few firms paid it. D) there is a cost to shirking because the shirking worker will spend a greater time unemployed after being caught and fired.
Which of the following is true? a. The long run supply curve for a competitive increasing cost industry will be upward sloping
b. The long run supply curve for a competitive increasing cost industry will be more elastic than the industry's short run supply curve. c. The long run supply curve for a competitive increasing cost industry will be horizontal. d. Both (a) and (b) are true.
Suppose a nation's saving, gross private domestic investment, government spending, and taxes remained unchanged from Year 1 to Year 2, but tariffs and quotas on imported goods and services rose by 20% from Year 1 to Year 2 . The net effect on the balance on goods and services would be:
a. It would have no effect on the balance on goods and services. b. It would make the balance on goods and services more positive. c. It would make the balance on goods and services more negative. d. There is no way to tell what effect it would have on the balance on goods and services.
In the markets for the factors of production in the circular-flow diagram, households are buyers and firms are sellers
a. True b. False Indicate whether the statement is true or false