Suppose a plaintiff hires a lawyer to represent her in a court case. Under which of the following contracts is efficiency in risk bearing assured?
A) The lawyer is paid by the hour.
B) The lawyer receives a share of the settlement.
C) The lawyer receives a fixed fee.
D) It is impossible to determine without the degree of risk aversion for each.
D
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Suppose that the economy is in long-run equilibrium and the government decided to engage in expected expansionary policy by increasing the money supply
If we assume rational expectations, which of the following statements is correct about the effect of expansionary policy in the long run? A) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will decrease. B) The unemployment rate will increase, real GDP will increase and the price level will increase. C) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will increase. D) The unemployment rate will decrease, real GDP will decrease and the price level will decrease.
Why do people and firms in the United States supply dollars to the foreign exchange market?
What will be an ideal response?