The agency problem can be avoided if
A) the firm is not subject to regulation by a government agency.
B) the manager and owner can manipulate reported profit.
C) the firm has positive profits.
D) the goals of the owner and manager are aligned.
D
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If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent, the bank can loan a maximum of
A) $75,000. B) $85,000. C) $95,000. D) $80,000. E) $100,000.
Refer to above figure. In the absence of trade, how many Widgets does this country consume?
What will be an ideal response?
In 1979, Fed chair Paul Volcker decided to pursue a policy
a. that would lead to disinflation. b. that would create falling prices. c. to accommodate continuing adverse supply shocks. d. that maintained money growth at its current level.
The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of
A. fallacy of logic. B. fallacy of inductive reasoning. C. ceteris paribus fallacy. D. post hoc, ergo propter hoc fallacy.