Reduction in the quality of agricultural land through overuse is called

Foreign investment in poor nations often requires

A) low rates of return to ensure the poor have a fair deal. B) high rates of return to justify the high risk of such investment. C) a constantly changing political structure to enhance profit opportunities. D) the total elimination of uncertainty in order to guarantee economic profit.

The principal-agent problem

A) occurs when managers have more incentive to maximize profits than the stockholders-owners do. B) in financial markets helps to explain why equity is a relatively important source of finance for American business. C) would not arise if the owners of the firm had complete information about the activities of the managers. D) explains why direct finance is more important than indirect finance as a source of business finance.