Suppose the U

question 54

Multiple Choice

Suppose the U.S. House of Representatives is debating a bill to fund construction and maintenance for the nation's highway system. Representative Sandy Shady adds a provision to the bill that would fund a new public
Art museum in her district. The authorization of expenditure for the museum would be an example of

• A) an earmark.
• B) an unfunded liability.
• C) a collective action problem.
• D) a principal-agent problem.

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Definitions:

Greenmail

A strategy used to shake off a bidder’s hostile suit by offering to buy, at significantly higher cost, the portion of stock already owned by the bidder who is trying to take over the company.

Valuable Piece

An item considered to have significant monetary or sentimental worth.

Hostile Bidder

A company or individual that makes an offer to buy another company without obtaining the consent of the latter's board of directors.

Friendly Suitor

An individual or entity that proposes a non-hostile takeover or merger with another company, often presenting mutually beneficial terms.