Comment on the following statement: "When a firm retains earnings for investment purposes, it is actually saving on behalf of its shareholders."
What will be an ideal response?
The statement is true. If the firm did not retain its profits, it would distribute them to shareholders in the form of dividends. Households could then decide whether to save these funds or spend them. Thus, by making the decision to hold onto a portion of its profits, it is making the decision to save these profits on behalf of its shareholders.
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Economic growth may overstate changes in the standard of living if
A) people are retiring at a younger age. B) the average workweek is increasing. C) the number of students attending college is increasing. D) expected life spans are increasing.
In order for a Pareto improvement to occur, someone must suffer a loss so that others may benefit from the improvement
a. True b. False
Explain how tax cuts can impact both aggregate demand and aggregate supply. Give an example of each
If Sam and Sally are off their contract curve for dining hall tickets and economics texts and they meet to move to the contract curve, describe the conversation that would likely take place.
What will be an ideal response?