Which of the following offers an explanation as to why the principal-agent problem exists for a firm?
a. The firm cares less about profit and more about cost when there are many competitors in the market.
b. The firm offers an employee-incentive program in which employees share in the firm's profits.
c. The firm operates in a market with many competitors forcing the firm to pay its employees more to keep them from switching to another firm.
d. The firm operates to maximize profit while the employees attempt to work as little as possible to earn their paychecks.
d
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Which of the following is a lesson that can be learned from monetary policy during the Great Depression?
a. Monetary policy should be changed frequently in response to economic fluctuations. b. Prolonged periods of monetary contraction will retard economic growth. c. Low interest rates will direct an economy toward recovery. d. Monetary policy should focus on variables such as output and employment.
A production point is said to be efficient if there is no way for the economy to produce more of one good without producing less of another
a. True b. False Indicate whether the statement is true or false
If the company can correctly anticipate the adverse selection, what premiums would it charge??
a. $2500
b. $2600
c. $1000
d. $1100
The ECB has the following mandates, EXCEPT:
A) use interest rates to implement the policy of price stability. B) use monetary policy to fulfill objectives of the European Union community. C) not be under the jurisdiction of any other European Union institution. D) finance deficits of member countries when needed.