The option to buy a company's stock at some future time at current prices is often given to CEOs
a. as an incentive to take actions that will raise the share price.
b. because CEOs are often friends of those who hire them.
c. as a means of discouraging the CEO from taking any risky actions.
d. because this has become the custom of the business culture.
a. as an incentive to take actions that will raise the share price.
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The figure illustrates aggregate demand and aggregate supply in Sparta. Which of the following events will decrease Sparta's real GDP in the short run?
A) a decrease in taxes B) a fall in resource prices C) a decrease in government expenditure D) an increase in investment
Which of the following countries does not employ a value-added tax at the national level?
a. France b. German c. United States d. Canada
The loss in social surplus that occurs when the economy produces at an inefficient quantity is called
a. efficiency. b. consumer surplus. c. social surplus. d. deadweight loss.
Figure 16-2
Assume that a contractionary monetary policy has shifted the aggregate demand curve in Figure 16-2 from D0D0 to D1D1. Fiscal authorities who wish to restore real GDP to the full-employment level will
a.
run a budget surplus by increasing taxes or cutting government spending.
b.
run a balanced budget to prevent the interest rate from rising and cutting off investment.
c.
run a budget deficit by cutting taxes or increasing government spending.
d.
ignore the change in monetary policy since it has no effect on fiscal policy.