Which of the following would be an example of a principal trying to deal with a moral hazard problem?
a. The parents of an infant secretly place video cameras in their house before the baby-sitter arrives.
b. An insurance company checks police records to determine if its policyholders have received traffic citations.
c. An employer examines his workers' output on a daily basis.
d. All of the above are correct.
d
Economics
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If you know the cross elasticity between two goods is negative, then you know the goods are
A) substitutes. B) normal goods. C) complements. D) inferior goods. E) inelastic goods.
Economics
The securitization of mortgages was first carried out by
A) Fannie Mae and Freddie Mac. B) WorldCom and Enron. C) the Federal Deposit Insurance Corporation (FDIC). D) Sarbanes-Oxley.
Economics