Due to a recession in the US, the average rate of return on investments is likely to fall causing the demand for US dollar to
a. Increase
b. Decrease
c. Not change
d. None of the above
QUESTION 2A firm deciding to hire a secretary, bases its decision on how well the candidate is trained on certain software. This practice addresses:
a. Adverse selection
b. Moral hazard
c. Forced bankruptcy
d. None of the above
QUESTION 3If a firm is earning negative economic profits, it implies
a. That the firm's accounting profits are zero
b. That the firm's accounting profits are positive
c. That the firm's accounting profits are negative
d. More information is needed to conclude about accounting profits
QUESTION 4Due to a recession in the US, the average rate of return on investments is likely to fall causing the US dollar to
a. Appreciate
b. Depreciate
c. Not change in value
d. None of the above
QUESTION 5A firm that screens candidates to determine how well they would work with limited supervision is afraid of facing
a. Adverse selection
b. Moral hazard
c. Forced bankruptcy
d. None of the above
QUESTION 6Total costs equal
a. Fixed costs
b. Variable costs
c. Sunk costs
d. Fixed plus variable costs
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