The problem arises with principals and agents when the goals of the agent are incompatible with those of the principal and when the agent cannot pursue hidden actions
Indicate whether the statement is true or false
false
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All else equal, an increase in the government's budget deficit accompanied by a decrease in corporate taxes would definitely result in
A) an increase in the equilibrium real interest rate. B) a decrease in the equilibrium real interest rate. C) an increase in the equilibrium level of saving and investment. D) a decrease in the equilibrium level of saving and investment.
Which of the following statements accurately describes pre-1763 British colonial policy?
a. England taxed the colonies extensively, requiring the colonists to pay a substantial portion of the costs of government administration and military protection. b. The Navigation Acts placed a severe economic burden on the colonies, equaling more than 30 percent of colonial income. c. England discouraged western settlements in an effort to reduce conflicts between colonists and Native Americans. d. Colonial laws were not officially in effect until the Privy Council granted its approval. e. All of the above statements accurately describe pre-1763 British colonial policy.
Information supplied to consumers by the government rarely ever helps in making better decisions
a. True b. False Indicate whether the statement is true or false
Tom walks Bethany's dog once a day for $50 per week. Bethany values this service at $60 per week, while the opportunity cost of Tom's time is $30 per week. The government places a tax of $35 per week on dog walkers. After the tax, what is the total surplus?
a. $50 b. $30 c. $25 d. $0