The principal-agent problem that exists for bank trading activities can be reduced through
A) creation of internal controls that combine trading activities with bookkeeping.
B) creation of internal controls that separate trading activities from bookkeeping.
C) elimination of regulation of banking.
D) elimination of internal controls.
B
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Whether exchange is between individuals, firms, or countries, voluntary trade occurs because:
a. only one party is made better off. b. both parties are made better off. c. financial agents devote resources to arranging such trades. d. these trades create employment for the economy. e. of mandates from the government.
The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains should have been higher. The Secretary's statement is a ___________ economic statement, and the labor union head's statement is a(n) _____________ economic statement
a. normative; normative b. normative; positive c. positive; normative d. positive; positive e. proper; improper