Franchising mitigates:
A. the hold-up problem.
B. the principal-agent problem.
C. opportunism.
D. relationship-specific investment.
Answer: B
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Describe the gaps between real GDP per person in the United States and in other countries. For which countries is the gap narrowing? For which is it widening? For which is it the same?
What will be an ideal response?
If the price effect outweighs the income effect of a wage increase, the quantity of labor supplied will:
A. be negative. B. remain the same. C. increase. D. decrease.
In early 2010 Molly paid $200,000 for a house built in 2000 . She spent $30,000 on new materials to remodel the house. Although Molly lived in the house after she remodeled it, its rental value rose. Which of the following contributed to real GDP in 2010?
a. the price of the house, the cost of remodeling materials, the increase in rental value b. the price of the house and the cost of remodeling materials, but not the increase in rental value c. the costs of the remodeling materials and the increase in rent, but not the price of the house d. None of the above are correct.
Which of the following statements is false?
A. A liquidity trap means that at very low interest rates people simply hold their money. B. Since the late 1990s, Japan has been caught in a liquidity trap. C. The liquidity trap relates to the precautionary demand for money. D. Keynes cited the liquidity trap as one of the consequences of the speculative demand for money.