Answer the following statement(s) true (T) or false (F)
1. A negligence standard, with the allowance of contributory negligence, always leads to a socially optimal outcome.
2. Strict liability is the liability that exists when it can be proven beyond a reasonable doubt that the defendant was negligent.
3. Negligence is irrelevant when a strict liability standard is applied.
4. The principle of general average gives a ship's captain an incentive to consider the value of cargo when jettisoning it to prevent a disaster.
5. The doctrine of Respondent Superior contends that an employer is sheltered from torts committed against his employees.
1. False
2. False
3. True
4. True
5. False
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Explain how an increase in American interest rates will lead to an appreciation of the U.S. dollar vis-à-vis the British pound
An unexpected increase in the supply of money will
a. reduce the real rate of interest and, thereby, trigger an increase in current spending by households and businesses. b. reduce aggregate demand and real output in the short run. c. increase only the general level of prices in the short run. d. lead to a higher rate of unemployment in the short run.