What are some of the solutions for a hold-up problem?
a. Mergers
b. Contracts
c. Exchange of ‘hostages'
d. All the above
d
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Refer to Table 8-20. Given the following information, calculate the rate of increase in the price level from 2015 to 2016
A) 8.6% B) 7.9% C) -7.9% D) -8.6%
If lenders anticipate no changes in liquidity, information costs, and tax differences, the yield on a risky security should be
A) greater than that on a safe security and the price of a risky security should also be greater than that of a safe security. B) less than that on a safe security and the price of a risky security should also be less than that of a safe security. C) greater than that on a safe security and the price of a risky security should be lower than that of a safe security. D) less than that on a safe security and the price of a risky security should be greater than that on a safe security.
Central banks that are relatively free from political interference, and are thus ________ likely to be time inconsistent, generally have a ________ record of achieving low inflation
A) more, better B) more, worse C) less, better D) less, worse
When an innovation is created by one firm in a perfectly competitive market,
a. the market price will rise b. less output will be produced by its competitors c. the long-run equilibrium price remains the same but the economic profit of its competitors falls d. some firms leave because the price will fall e. other firms will imitate the innovator