List and define the two categories of after-tax corporate profits
What will be an ideal response?
(1.) Dividends are the after-tax profits distributed to shareholders.
(2.) Retained earnings are the after-tax profits retained by the corporation.
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When the financial institution is hedging interest-rate risk on its overall portfolio, then the hedge is a
A) macro hedge. B) micro hedge. C) cross hedge. D) futures hedge.
In the recent Global Economic Crisis, the negative wealth effect caused
A) LM curve to shift to the right. B) LM curve to shift to the left. C) IS curve to shift to the left. D) LM curve to shift to the right.
According to the substitution effect, an increase in the price of oranges will: a. cause consumers to consume fewer apples because more money is spent on oranges
b. cause consumers to spend more on oranges because a higher price signals that oranges are better than apples. c. cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges. d. leave consumers with less money to spend on all goods.
Which of the following products is most likely to provide positive externalities?
a. a concert ticket b. an ice cream cone c. a college degree d. a toothbrush