A solution to the budget-gaming problem is
a. Introduce milestones or kinks in the compensation scheme
b. Use a straight line pay for performance function
c. Base compensations on meeting particular budget goals
d. All of the above
b
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What is TRUE of the aggregate supply curve in the classical model?
A) The aggregate supply curve is downward sloping. B) The aggregate supply curve is vertical. C) The aggregate supply curve is horizontal. D) The aggregate supply curve is not determined by the level of employment.
Suppose that a bank begins with $500 million in deposits and $100 million in reserves and is just meeting its desired reserve ratio. Now suppose a decrease in the required reserve ratio lowers the desired reserve ratio to 10 percent
After the fall in the desired reserve ratio but before the bank makes any changes, the bank's excess reserves are A) 0. B) $400 million. C) $450 million. D) $50 million.
As the expected future spot rate moves closer to the spot rate, uncovered interest parity indicates that:
a. interest rates should remain constant. b. interest rates should converge. c. interest rates should diverge. d. The answer depends on whether the expected future spot rate is higher or lower than the spot rate.
A popular entertainer gives a concert in a 50,000 seat stadium. To give her fans a break, she charges only $50 a seat instead of the customary $75 a seat. At $75 a ticket, there would have been 50,000 tickets sold, and at $50, there are 80,000 people who want tickets. As a consequence of the generosity of the entertainer
A. another type of system will have to be found to allocate the tickets, making some of her fans better off and others worse off. B. her fans are made worse off since there is an excess demand of 30,000 tickets. C. her fans are made better off. D. a more fair system of pricing the tickets has been found.