During the 1970s, U.S. prices generally rose faster than prices in other parts of the world. Which of the following changes would the open economy effect predict took place in response to these price level changes?
a. Americans reduced the proportion of foreign goods bought since their foreign prices became relatively lower.
b. Americans reduced the amount of investment they undertook because
interest rates increased.
c. Americans reduced the amount of goods and services they wanted to purchase for consumption because they felt less wealthy.
d. Americans reduced the fraction of purchases they made from domestic producers of goods and services, since foreign prices became relatively lower.
d
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Which of the following statements is true?
a. Planned economies have fared very well in recent years, with many of these economies thriving. b. Command economies operate the most efficiently because the government makes all the production decisions. c. In a command economy, consumers answer the questions of what to produce, how to produce it, and how to distribute d. In command economies, consumers still exercise choice.
One of the ways of coping with the principal-agent problem is
A) giving orders. B) providing incentive pay. C) shirking. D) using only short-term contracts.