The principal-agent problem is a problem
A) caused by a person (principal) who hires an agent to act on his behalf but is unwilling to delegate authority to the agent to carry out the task in the best possible way.
B) caused by agents pursuing their own interests rather than the interests of the principals who hired them.
C) of the power system of boss and subordinate where the boss (principal) exerts influence over his subordinates (agents) using punishment or threat.
D) that exists when a person (principal) has more information about the task than the agent he hires to perform the task.
Answer: B
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In a closed economy, public saving is the amount of
a. income that households have left after paying for taxes and consumption. b. income that businesses have left after paying for the factors of production. c. tax revenue that the government has left after paying for its spending. d. spending that the government undertakes in excess of the taxes it collects.
Real GDP
a. moves in the opposite direction as unemployment. b. increases as production falls. c. falls when households save a smaller fraction of their income. d. All of the above are correct.