A corporation with "plowback"
a. deliberately earns negative profit on some activities in order to get better tax treatment.
b. buys back shares of its stock from shareholders.
c. retains some of its earnings for investment.
d. issues unsecured stock.
c
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Another term for "don't put all your eggs in one basket" is
A) moral hazard. B) indirect finance. C) asymmetric information. D) portfolio diversification.
In a monopolistically competitive market, the consumer receives the benefit of
A) production at minimum average cost. B) production where price equals marginal cost. C) product differentiation. D) allocative efficiency.
The quantity demanded of a good is the amount that buyers are a. willing to buy
b. willing and able to buy. c. willing, able, and need to buy. d. able to buy.
Briefly explain how reductions in government purchases and tax decreases would influence aggregate demand through the multiplier effect. Give an example.
What will be an ideal response?