Which of the following are not subsets of the ability-to-pay principle?
a. horizontal equity
b. vertical equity
c. diagonal equity
d. beneficial equity
c
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A decrease in the money supply in the short run will cause an increase in planned investment spending
a. True b. False Indicate whether the statement is true or false
Jim, an avid biker, broke his leg last year and will never be able to use his bike again. He was offered $100 for it last year, but Jim refused to sell it, insisting it was worth more. A year later, he's offered only $75 for it, but Jim still refuses to sell it. Jim's behavior could be explained by:
A. substitution effect. B. limited processing power. C. the endowment effect. D. status quo bias.
To reduce Agency problems, executive compensation should be designed to
a. be paid baased on quarterly sales b. create incentives so that managers act like owners of the firm c. avoid making the executives own shares in the company d. be an increasing function of the firm's expenses e. all of the above
Fixed costs and overhead are identical
Indicate whether the statement is true or false