The principal-agent problem
A) occurs when managers have more incentive to maximize profits than the stockholders-owners do.
B) in financial markets helps to explain why equity is a relatively important source of finance for American business.
C) would not arise if the owners of the firm had complete information about the activities of the managers.
D) explains why direct finance is more important than indirect finance as a source of business finance.
C
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If the price elasticity of demand for a good equals one, then the demand for that good is:
A. inelastic. B. elastic. C. unit elastic. D. perfectly elastic.
Define the term normal good. How can a normal good be recognized from
(i) the Engel curve diagram, (ii) the income elasticity of demand, and (iii) the substitution and income effects of a price change?
Fill in the blank: Your authors claim ________ has been the rule rather than the exception through almost all of human history
A) price stability B) poverty C) disinflation D) wealth
Research by Harvard economists Barro and McCleary revealed that church attendance and economic growth have a(n) _______________ relationship. They also found that specific religious beliefs (in heaven, hell, and afterlife) and economic growth have a(n) ___________ relationship
A) inverse; inverse B) direct; direct C) inverse; direct D) direct; inverse