Which of the following statements are TRUE?
A) A bank's assets are its sources of funds.
B) A bank's liabilities are its uses of funds.
C) A bank's balance sheet shows that total assets equal total liabilities plus equity capital.
D) A bank's balance sheet indicates whether or not the bank is profitable.
C
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A risk-averse manager is hired to run a firm for shareholders. If the manager's effort can be observed and specified in a contract, which would be the best employment contract?
a. a high-powered incentive contract to elicit the most effort. b. a fixed salary paid as long as the required effort is undertaken. c. a proportion of profits paid as long as the required effort is undertaken. d. a wage well in excess of his or her outside opportunity.
Which of the following individuals are considered officially unemployed?
a. a discouraged worker b. an individual who quits his job to raise a child c. an individual who is not looking for a job because he works in the underground economy d. None of the above