Describe the characteristics of an efficient contract between a principal and an agent
What will be an ideal response?
An efficient contract is efficient in production. The principal's and agent's combined value of the contract is maximized. An efficient contract is also efficient in risk bearing. The risk sharing is optimal so that a relatively less risk-averse person bears more of the risk.
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In the figure above, one factor NOT responsible for the decline in the demand for money is
A) a decline the price level. B) a decline in income. C) an increase in income. D) a decline in the expected inflation rate.
A budget philosophy using fiscal policy to achieve the economy's potential GDP, rather than balancing budgets either annually or over the business cycle, is termed: a. budget finance
b. functional finance. c. crowding out. d. crowding in. e. deficit finance.