The principal-agent problem means that managers must
A) find ways for managers to get people to buy stock in their company.
B) devise compensation rules to induce principals to act in the best interest of agents.
C) devise compensation rules to induce agents to act in the best interest of principals.
D) find efficient agents who will negotiate fair compensation rules for a firm's principal managers.
C
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Stealth bank holds deposits of $200 million. It holds reserves of $15 million. It has purchased government bonds worth $75 million. The current value of its loans, if sold at market value, is $130 million. What is the value of the Stealth bank’s liabilities?
a. $20 million b. $200 million c. $5 million d. $330 million
When the Mexican peso gets "stronger" relative to the dollar,
a. the U.S. trade deficit with Mexico rises. b. the U.S. trade deficit with Mexico falls. c. the U.S. trade deficit with Mexico is unchanged. d. None of the above necessarily happens.
Recall the Application about how cable TV providers respond to the threat of potential competitors to answer the following question(s).Recall the Application. Because cable TV had to fend off potential entrants into their markets, cable TV providers are considered ________ as long as they successfully deterred entry.
A. insecure monopolists B. duopolists C. perfect competitors D. monopolistic competitors
Raising the tax rate lowers the tax-adjusted MPC
Indicate whether the statement is true or false