The profits a corporation keeps to finance future expansion are known as
A) preferred stock. B) dividends. C) retained earnings. D) capital gains.
C
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Often managers require a payment due to their risk aversion. This payment is called
A) a golden parachute. B) greenmail. C) a poison pill. D) rollover compensation
Given that Tamar is a risk-averse person, she might accept a bet with a 50 percent chance of losing $100 today if she had a 50 percent
a. chance of winning $120 in two years and the interest rate was 11%. b. chance of winning $114 in two years and the interest rate was 7%. c. chance of winning $110 in two years and the interest rate was 3%. d. None of the above are correct; a risk averse person would not accept any of the above bets.
Suppose Congress passes an investment tax credit that increases the quantity of investment goods that firms demand at any given interest rate. Which of the following would you expect to occur as a result of this change?
a. In the short run, unemployment will increase and inflation will fall. b. In the short run, unemployment will increase and inflation will rise. c. In the short run, unemployment will decrease and inflation will rise. d. In the short run, unemployment will decrease and inflation will fall.
Other things the same, if the central bank decreases the rate at which it increases the money supply, then
a. unemployment and inflation rise in the short run. b. unemployment rises and inflation falls in the short run. c. unemployment falls and inflation rises in the short run. d. unemployment and inflation fall in the short run.