The principal-agent problem suggests that
A) principals and agents always have the same goals.
B) principals and agents will never have the same goals.
C) principals and agents are more likely to have the same goals if the principal gives the agent flexibility to make his own decisions.
D) principals and agents are more likely to have the same goals if the agent's pay is tied to satisfying the principal's goals.
D
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The Kwakiutl Indians of the Northwest used Hudson Bay blankets as a general medium of exchange. In the economic way of thinking, their blankets were therefore used
A) irrationally. B) as goods in and of themselves. C) without regard to their value. D) as money.
A country is said to have a comparative advantage in the production of a good when it:
a. has the lower opportunity cost of producing the good. b. can produce the good using fewer resources than another country. c. requires fewer labor hours to produce the good. d. all of these.
Suppose a decline in U.S. income causes Americans to decrease their demand for all normal goods, including those produced in Europe. How will this change affect the foreign exchange market?
a. A decrease in U.S. income will increase the U.S. demand for foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods more expensive to U.S. residents. b. A decrease in U.S. income will decrease the U.S. demand for foreign exchange, thus decreasing the dollar-per-euro exchange rate, making European goods cheaper to U.S. residents. c. A decrease in U.S. income will decrease the U.S. supply of foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods cheaper to U.S. residents. d. A decrease in U.S. income will increase the U.S. supply of foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods expensive to U.S. residents.
Which of the following is a valid comparison of real and nominal GDP?
What will be an ideal response?