Which of the following is true of a change in dividend payments?
A. There is no substitution effect because a change in dividend payments does not change the trade-off between work and leisure.
B. There is no substitution effect because a change in dividend payments does not change a household's permanent income.
C. There is no income effect because a change in dividend payments does not change the trade-off between work and leisure.
D. There is no income effect because a change in dividend payments does not change a household's permanent income.
Answer: A
You might also like to view...
In policy discussions macroeconomic aggregates (inflation, unemployment, and productivity) are called
A) monetary variables. B) fiscal variables. C) target variables. D) interest variables.
Over the last 40 years, the gap between the rich and the poor in the United States has been increasing. Economists have justified this outcome by noting that
A. efficiency can never be achieved without greater inequality. B. inequality is not a problem. C. inequality is a desirable policy outcome. D. inequality is a necessary consequence of achieving greater efficiency. E. efficiency should be achieved regardless of the cost.
Changes to the ______ lead to shifts in the demand curve.
a. determinants of demand b. price of the good being studied c. quantity demanded d. supply of the good being studied
Purchasing power parity suggests that the exchange rate between two currencies reflects differences in the overall price levels in the two countries
Indicate whether the statement is true or false