If the interest rate is 4 percent, how much interest would the retiree earn the first year if she opted for the lump sum payment, and chose to invest the entire payment at this interest rate?

Which of the following would most likely induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease in

A) business taxes. B) income tax rates. C) oil prices. D) investment spending.

In a principal-agent problem, if the contract implies that the more risk-averse agent will bear less risk, we can say that this contract exhibits

A) efficiency in risk-bearing. B) risk sharing is not optimal because the less risk-averse (or risk-neutral) agent should bear none of the risk. C) risk sharing is not optimal because all risk should be transferred to the most risk-averse agent. D) risk sharing is not optimal because risk-neutral agents should face no risk.