If the MPC = .75, the spending multiplier is:

The principal-agent problem means that managers must

A) find ways for managers to get people to buy stock in their company. B) devise compensation rules to induce principals to act in the best interest of agents. C) devise compensation rules to induce agents to act in the best interest of principals. D) find efficient agents who will negotiate fair compensation rules for a firm's principal managers.

Implicit costs can be defined as

A) the non-monetary opportunity cost of using the firm's own resources. B) the deferred cost of production. C) total cost minus fixed costs. D) accounting profit minus explicit cost.