When an economy is operating at the steady state, we know that
A) steady state saving equals consumption.
B) steady state saving is less than total consumption.
C) steady state saving is equal to depreciation per worker.
D) steady state saving exceeds depreciation each year by a constant amount.
E) none of the above
C
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The figure above shows the market for low-skilled labor in Midland city. The government sets a minimum wage at $6 per hour. With the minimum wage law enacted, the potential loss from job search in Midland city is
A) $60 million. B) $120 million. C) $40 million. D) zero.
What can be done to deal with the principal-agent problem?
A) forbid managers from owning any company stock B) have the CEO be a rotating position C) link top manager salaries to the profits of the firm or the price of the firm's stock D) threaten to liquidate the firm