Does it ever make sense to purchase a stock that has never paid a dividend? Explain
Yes. If a firm does not pay out its profits as dividends, it retains those earnings to invest in the firm. If its investments are good, they will increase the firm's future profits. The prospect of greater future profits raises the value of the stock. A good investment is simply one that increases the stock value by more than the amount of the forgone dividend. In general, stockholders are happy either with profits now or with a rising stock price.
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The equilibrium level of employment, achieved after the complete adjustment of wages and prices, is known as the
A) zero-unemployment level of employment. B) natural state. C) invisible handshake. D) full-employment level of employment.
According to most economists, reducing automobile emissions to zero would be:
a. optimal. b. inefficient. c. beneficial. d. impossible.
Where interdependence is especially pronounced, competition among oligopolists will
A. resemble military tactics and strategies. B. disappear. C. lead to large increases in product output. D. entice more firms to enter the market.
Private employees (more frequently than public employees) tend to have their private retirements in
A. Ponzi schemes. B. defined contribution programs. C. defined benefit pension programs. D. Social Security.