Suppose that Canada produces 1.0 million bicycles a year and imports another 4.0 million; there is no tariff or other import barriers. Bicycles sell…
September 3, 2020
a. How is the U.S. budget deficit related to the foreign trade deficit? b. Firms hurt by cheap imports typically argue that restricting trade will
September 3, 2020

Suppose the principal cares about output y= e1 – de2, but observes signal x=e1 + ae. What β would the principal choose in the compensation scheme w= α + βx if d= 1/2? What β would the principal choose if d= 1 ( you should answer this without doing calculation)? Provide a brief explanation.

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