Many fast-food restaurants have signs on their cash registers that read, "Your meal is free if the cashier does not give you a receipt". What might be the purpose of such a sign? Hint: there is a moral hazard problem here
What will be an ideal response?
In a fast-food restaurant it would be quite easy for the cashier to not ring up the purchase and simply pocket the cash. The sign is likely meant more as a warning to their employees to not steal. It is also a fairly cheap way of having someone else (the customer) do the monitoring of their employees behavior.
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To fight unemployment and close a recessionary gap, the Fed ______
A. stimulates aggregate demand by lowering the federal funds rate, which increases the quantity of money B. stimulates aggregate supply by lowering the federal funds rate, which increases potential GDP C. increase employment, which increases real GDP D. increases bank reserves, which banks use to make new loans to busi-nesses, which increases aggregate supply
Corporate governance involves the way in which
A) the government licenses corporations. B) a corporation is structured. C) the government nationalizes corporations. D) a corporation is subject to government regulations.
A trade deficit occurs when:
a. a country imposes a price floor on the good in which it has a comparative advantage. b. a country's imports exceed its exports. c. a country imposes a price ceiling on the good in which it has a comparative advantage. d. a country's exports exceed its imports. e. the domestic product market is in disequilibrium.
If Risky, Riskier, and Riskiest Insurance decided to begin charging all of its auto insurance clients the same premium, what would eventually happen?
a. They would have only safe drivers. b. They would have only dangerous drivers. c. They would have an equal blend of safe and dangerous drivers. d. They would have only medium-risk drivers.