Why does a coal miner earn more than a file clerk with similar education and backgrounds?
a. more skills
b. more risk
c. better work environment
d. none of the above explain the wage differential between file clerks and coal miners
b
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When a currency is undervalued, international reserves ________ and the country has a balance-of-payments ________.
A. decrease; surplus B. increase; deficit C. decrease; deficit D. increase; surplus
Default risk arises from the fact that
A) borrowers differ in their ability to repay in full the principal and interest required by a loan agreement. B) the bond price drops when interest rates rise. C) it is inherently riskier to wait for a capital gain than to receive an immediate interest payment. D) interest rates are far more likely to go up than to go down.
The potential for a decline in product quality due to asymmetric information is commonly referred to as
A) the lemons problem. B) planned obsolescence. C) diminishing marginal product. D) the externality problem.
Most of a typical firm’s financing comes from ______.
a. bond issues b. stock issues c. earnings reinvestment d. mutual fund sales