Why do firms pay dividends? It would appear that they are subject to double taxation, giving more incentive to eliminate them.
What will be an ideal response?
Dividends may serve as a signal of a firm's financial strength. They may also be used to cater
to a particular clientele.
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Refer to Figure 2-9. What is the opportunity cost of producing 1 snow cone in Iceland?
A) 2/3 of a popsicle B) 3/4 of a popsicle C) 1 1/2 popsicles D) 180 popsicles
Refer to Figure 9-4. Under autarky, the equilibrium price is
A) $54. B) $30. C) $0. D) $24.
The amount of money a firm pays to lease a building it uses for office space is called:
A) the full opportunity cost of production. B) an explicit cost. C) a real cost of production. D) an implicit cost.
According to the Taylor rule, when inflation and/or output is above its target, then:
a. the federal funds rate must be negative. b. the federal funds rate must be above its target. c. the federal funds rate must be above inflation. d. none of the above are correct.