Paying salespeople a fixed wage contract, one in which income does not depend on the volume of sales, avoids
A) both adverse selection and moral hazard.
B) neither adverse selection nor moral hazard.
C) adverse selection but not moral hazard.
D) moral hazard but not adverse selection.
B
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The table above shows a nation's production possibilities frontier. If the nation wants to produce 4 robots and 34 pizzas,
A) the nation will be producing inefficiently. B) the opportunity cost is 9 pizzas. C) it will shift the production possibilities frontier. D) it will be unable to do so because the production point is unattainable. E) the nation will then be producing at a production efficient point.
A bank has $100 million of checkable deposits, $6 million of required reserves, and $2 million of excess reserves. What is the required reserve ratio?
a. 2 percent. b. 3 percent. c. 6 percent. d. 12 percent.