Suppose there is a reduction in cash flow. This suggests that
A) firms have decreased their expectations of future profits.
B) the real interest rate has increased.
C) the rate of depreciation has increased.
D) current profits have decreased.
E) all of the above
D
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As firms reduce their stock of capital, labor demand ________ and labor supply ________
A) decreases; stays the same B) decreases; decreases C) increases; stays the same D) increases; increases
A strategy A is "dominant" for a player X if
A) strategy A contains among its outcomes the highest possible payoff in the game. B) irrespective of any of the possible strategies chosen by the other players, strategy A generates a higher payoff than any other strategy available to player X. C) strategy A is the best response to every strategy of the other player. D) strategy A is the best response to the best strategy of the other player. E) every outcome under strategy A generates positive payoffs.
The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:
A. income effect. B. price effect. C. substitution effect. D. labor effect.
If an increase in inflation is expected, which of the following events is the least likely to occur?
a. There will be an upward movement along the long-run Phillips curve. b. Nominal GDP will increase. c. Nominal wage rates will increase at the same rate as expected inflation. d. A worker's reservation wage will rise at the same rate as expected inflation. e. Unemployment rate will increase.