If a salesperson is paid by the volume of sales he or she makes, then the
A) moral hazard problem is diminished.
B) moral hazard problem is enhanced.
C) adverse selection problem is enhanced.
D) None of the above answers is correct.
Question 2
________ in the currency drain ________ the money multiplier.
A) A decrease; does not change
B) An increase; increases
C) A decrease; decreases
D) An increase; decreases
