Typically, the most important determinant of private investment in an economy is
A) the inflow of foreign investment.
B) the size of the capital account surplus.
C) the size of the current account deficit.
D) the outflow of private investment.
E) the amount of domestic savings.
E
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Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, ________ in country B will tend to ________
A) labor supply; decrease B) labor demand; decrease C) labor demand; increase D) labor supply; increase
An example of moral hazard is
a. A taxi driver paid per mile taking the shortest route b. a piece-rate garment worker shirking more than a per jour worker c. an hourly salesman working less hard than a commission salesman d. an author on contract going to as many book signings as one with a percentage royalty rate