In the single-period principal-agent model:
A. the employer is risk-neutral but the employee is risk-averse.
B. both the employer and the employee are risk-neutral.
C. both the employer and the employee are risk-averse.
D. the employer is risk-averse but the employee is risk-neutral.
Answer: A
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A decrease in consumption will result in
A) both total utility and marginal utility decreasing. B) total utility increasing, but marginal utility decreasing. C) total utility decreasing, but marginal utility increasing. D) both total utility and marginal utility increasing.
Market failure is a situation in which
A. the market does not provide the ideal or optimal amount of a particular good. B. there are too many buyers but not enough sellers. C. prices are too high for "average" people to buy necessities. D. there is a question over the quality of a product for sale.
The key difference between "quantitative easing" and "credit easing" is that ________
A) the goal of the former is to raise expected inflation B) the latter refers to a substantial change in the composition of the central bank's balance sheet C) the latter refers to a substantial expansion of the central bank's balance sheet D) the former is endorsed by Federal Reserve Chairman Ben Bernanke, while the latter was devised by Japan's Prime Minister Shinzo Abe E) none of the above
________: when one nation can produce goods more cheaply than another nation
Fill in the blank(s) with correct word