What is the principal-agent problem?
What will be an ideal response?
The principal-agent problem is a problem caused by agents pursuing their own interests rather than the interests of the principals who hired them.
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If the nominal interest rate is 8 percent and the inflation rate is 2 percent, the real interest rate is approximately
A) 4 percent. B) 6 percent. C) 0.25 percent. D) 10 percent.
If monetary policy is used to control GDP, there is greater sacrifice of long-run economic growth in pursuing short-run stabilization the ________ is fiscal policy and thus the ________ is the real interest rate
A) tighter, higher B) tighter, lower C) easier, higher D) easier, lower
If a game has a pure strategy Nash equilibrium then
A) it might also have a mixed strategy equilibrium. B) it does not have a mixed strategy equilibrium. C) at least one player has a dominant strategy. D) no player has a dominant strategy.
The largest component of aggregate demand is
A. investment spending. B. consumer spending. C. government spending. D. total imports.