A reason for dissavings in the economy could include:
A. College students who overspend with expectations of a higher income after their education is complete.
B. Breakup of families where the major wage earner leaves the household.
C. Death of a household's major wage-earner.
D. Unforeseen expenditures that cannot be covered by immediate household income.
E. All of the above.
Ans: E. All of the above.
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According to the capture hypothesis, it appears that regulators eventually end up
A) adopting policies that benefit the firms being regulated. B) adopting policies that benefit consumers at the expense of the regulated firms. C) adopting policies that benefit no one. D) satisfying neither producers nor consumers, but striving to control as much as possible.
Which are social costs associated with the inability of shareholders to observe an executive's effort? (You may choose more than one.) a. Excessive insurance offered
b. The executive has to be exposed to risk to induce effort, and risk is costly. c. The executive ends up exerting less than first-best effort. d. Excessive effort induced.