Author Question: An example of the moral hazard problem in international investment would be that A) those seeking ... (Read 73 times)

Davideckstein7 · **on:** Jun 29, 2018

An example of the moral hazard problem in international investment would be that

A) those seeking funds for the riskiest projects are amongst those most actively seeking the funds.
B) the recipients of the funds may use the funds for riskier projects than the approved project.
C) government officials may demand higher than the usual amount of bribes.
D) those seeking the funds are dishonest.

Question 2

The direct effect of an increase in the money supply is to

A) increase aggregate demand as people spend their excess money balances.
B) increase aggregate demand as interest rates fall and investment spending increases.
C) increase aggregate supply as producers anticipate higher future profits.
D) decrease the rate of inflation.