The principal-agent problem:
A. is caused by the principal having imperfect information about the agent.
B. is caused by the principal being unable to perfectly observe the actions of the agent.
C. arises from an imbalance of information.
D. All of these statements are true.
Answer: D
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If income rises from $1,000 to $1,400 and consumption rises from $800 to $1,168, the marginal propensity to consume is __________ percent
A) 8 B) 85 C) 15 D) 92
If velocity and output were nearly constant, then
a. the inflation rate would be much higher than the money supply growth rate. b. the inflation rate would be about the same as the money supply growth rate. c. the inflation rate would be much lower than the money supply growth rate. d. any of the above would be possible.
The law of demand states that
A. there is a direct positive relationship between relative price and quantity demanded. B. if the price of a good increases both relatively and absolutely, there will be no change in quantity demanded. C. consumers will exhaust their incomes as they purchase goods and services at given absolute prices. D. the quantity demanded of a good is higher at a lower relative price than at a higher relative price.
In the above figure, through which range would the demand for this good be most inelastic?
A. B-E B. G-H C. A-B D. E-F