In the Keynesian view, the volatility of investment is primarily due to
a) technological advancements
b) waves of productivity change
c) “creative destruction”: new industries destroying old ones
d) “animal spirits”: unpredictable episodes of optimism and pessimism
e) erratic monetary policy by the central bank
d) “animal spirits”: unpredictable episodes of optimism and pessimism
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If a corporation retains all its profits and distributes none of the profit to owners, how can owners benefit?
A) If the retained earnings are expected to create future profits, the market price of the firm's stock will increase and create a capital gain for stockholders if the stock is sold. B) Shares of stock can be converted into bonds so stockholders will be able to earn coupon payments. C) Owners will benefit by changing the board of directors. D) Owners will only benefit if some profits are paid out in the form of dividends.
Assume that inventories declined by more than analysts predicted. This implies that
A) planned aggregate expenditure was less than real GDP. B) planned aggregate expenditure is unrelated to real GDP. C) planned aggregate expenditure was greater than real GDP. D) planned aggregate expenditure was equal to real GDP.
The most unequal distribution of income in the above figure exists in
A) country 4. B) country 1. C) country 5. D) country 3.
It costs a firm $80 per unit to produce product A and $50 per unit to produce B individually. If the firm can produce both products together at $140 per unit of product A and B, this exhibits signs of
a. Economies of scale b. Economies of Scope c. Diseconomies of Scale d. Diseconomies of Scope