When a firm issues new shares of stock
A. it lessens the relative value of its net worth.
B. it does not add to its debt.
C. it increases its debt load.
D. it must buy back existing shares of stock in return.
Answer: B
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Pollution permit policies achieve an ________ outcome because ________.
A. efficient; firms that have the highest cost of reducing pollution will have the greatest incentive to purchase permits. B. efficient; firms that have the lowest cost of reducing pollution will be able to pay more for each permit. C. inefficient; wealthier firms can afford to purchase more permits. D. inefficient; the supply of permits is set by the government, and so is perfectly inelastic.
If a union limits its size to the number of employed members it had when the union was first formed, over time there will be
A) an increase in the supply of union labor. B) falling wages as demand for workers increases. C) rising wages as demand for workers increases and the supply increases proportionally. D) rising wages as demand for workers increases but some potential workers are denied a place in the union.
If a newspaper reporter wanted to learn about changes in the U.S. price levels, she would probably get that information by looking at the
a. real gross domestic product b. consumer price index c. latest press release from the Council of Economic Indicators d. nominal gross domestic product e. gross national product
A central focus of prospect theory is:
A. how people deal with "bads," as well as how they deal with "goods." B. optimizing precious metal discovery and extraction. C. maximizing returns from investment portfolios. D. how people make rational decisions despite having incomplete information.