Anna and Howard both own 100 shares of Photo-Hut. Anna buys stocks for income for current consumption, Howard buys stocks for their future growth. This year the firm has paid out all its profits to its stockholders. We can expect that
a. Anna and Howard will both spend the income.
b. Howard will spend the income, while Anna will use the money to buy more stock in the firm.
c. Howard will sell the stock since it is not reinvesting its profits.
d. Anna will spend the income, while Howard will use the money to buy more stock in the firm.
d. Anna will spend the income, while Howard will use the money to buy more stock in the firm.
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For a given level of inflation, if concerns about future weakness in the economy cause businesses to reduce their spending on new capital, then the ________ shifts ________.
A. short-run aggregate supply line; upward B. aggregate demand curve; left C. short-run aggregate supply line; downward D. aggregate demand curve; right
The phenomenon of underutilization of labor during a recession is called
A) labor stockpiling. B) investing in human capital. C) labor force stabilization. D) labor hoarding.
The incidence of a payroll tax
a. depends upon whether it is levied on the employer or employee. b. is the same whether it is levied on the employer or the employee. c. is more heavily on the employee as demand for labor becomes more elastic. d. is more heavily on the employer as demand for labor becomes less elastic.
In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes
a. compensating differentials. b. the increased recognition that a larger stock of human capital usually leads to higher earnings. c. the decreasing importance of labor unions. d. the increasing importance of international trade.