Answer: The presence of asymmetric information
Explanation: In simple words, asymmetric information refers to the situation when one party to a contract have extra information regarding a subject than the other party of the contract.
Asymmetric information creates the potential of misconduct from the leading party as they can easily cheat the other party by concealing that important information.
In the given case, Mr. Smith was aware that his laptop is not working properly but still he sold its to a customer who was not aware of it. Thus, we can conclude that the correct option is C.
Answer:
If Ricardian neutrality holds true, after this change in the government's budget, private savings will equal 40.
Explanation:
S - I = X - M, where
S = Sp + Sg, where
Sp: private saving
Sg: Public saving = T - G
Sp + T - G - I = X - M
or,
Sp - I = (G - T) - (M - X) = Budget deficit - Trade deficit
Initially,
65 - 30 = 90 - 100 = - 10
When budget deficit falls to 50,
Sp - 90 = 50 - 100
Sp = - 50 + 90 = 40
Therefore, If Ricardian neutrality holds true, after this change in the government's budget, private savings will equal 40.
<span>right to share in any remaining assets after creditors have been paid off, should the company cease operations. A residual claim is one benefit that common stock holders can receive. This claim takes effect once the company itself is liquidated. The assets that are left upon liquidation are divided evenly, and the common stock holders receive a proportional part of the assets at liquidation. Among this, common stock holders receive dividends.</span>
Answer:
Contraction cycle or Recession
Explanation:
The cyclical unemployment is due to the cycles of economy ( expantion:Grow and contraction: recession) Under these circumstances unemployment is considered normal as the economy cannot sustain itself always in an expansion cycle.
Answer:
22.13%
Explanation:
The effective annual rate formula below can be used to determine the actual rate charged by the bank as follows:
Effective annual rate=(1+APR/n)^n-1
APR=20%
n=number of times interest is computed yearly=365
Effective annual rate=(1+20%/365)^365-1
Effective annual rate=1.221335858
-1
Effective annual rate=22.13%
The actual rate of interest on bank loan is 22.13%
