A firm that screens candidates to determine how well they would work with limited supervision is afraid of facing
a. Adverse selection
b. Moral hazard
c. Forced bankruptcy
d. None of the above
b
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Government policies that are used to affect aggregate expenditure, with the objective of eliminating output gaps, are called ________ policies.
A. stabilization B. productivity C. cyclical D. structural
If the demand for farm products is income elastic, that would mean that farm products were a necessity
Indicate whether the statement is true or false
Which of the following policies could the Fed use to lower the interest rate?
A. a tax cut B. selling government securities C. raising the discount rate D. reducing the required reserve ratio
Which of the following is NOT true of a perfectly competitive firm?
A. It sells only a small fraction of the total quantity exchanged in the market. B. It seeks to maximize revenue. C. It is unable to influence the price of the good it sells. D. It faces a perfectly elastic demand curve.