Suppose a plaintiff hires a lawyer to represent her in a court case. The lawyer will receive a share of the settlement if the plaintiff wins. Under this contract,
A) production efficiency cannot be achieved.
B) the client bears all of the risk.
C) the lawyer bears all of the risk.
D) the risk is shared.
Answer: D) the risk is shared.
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Under the Bretton Woods system, the United States was designated as the
A) reserve-currency country. B) fixed-rate country. C) par-standard country. D) dollar-standard country.
If the Fed were to announce that fighting inflation is not a high priority for the immediate future ________
A) households might expect higher inflation B) the short run aggregate supply would shift upwards C) firms might begin raising their prices to keep up with expected inflation D) all of the above E) none of the above
Martin Shore lost his job when General Motors closed down its local plant. He has been visiting the personnel offices of the other factories in the area, looking for a new job. He is:
a. a member of the civilian labor force who is employed. b. a member of the civilian labor force who is unemployed. c. a member of the civilian labor force who is underemployed. d. a discouraged worker who is not a member of the labor force. e. not a member of the labor force.
The maximum amount by which the entire banking system can create money is equal to:
a. a fraction of its excess reserves. b. a fraction of its required reserves. c. a multiple of its total reserves. d. a multiple of its excess reserves. e. its excess reserves.