Which of the following scenarios would most likely occur with a company that has reported disappointing earnings recently but still looks to be financially stable for quite some time?
A. high long-term solvency ratio but low profitability ratio
B. high short-term solvency ratio but low profitability ratio
C. high long-term solvency ratio but low activity ratio
D. high short-term solvency ratio but low activity ratio
C. high long-term solvency ratio but low activity ratio
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Which scenario best illustrates a Gini coefficient equal to one?
a. People earn the same income. b. John receives a wage of $1 per hour. c. The king ends up with all the nation's income. d. There is a one-to-one ratio of income to population. e. 100 percent of the income is held by 100 percent of the population.
The same tools that were intended to allocate funds and spread risk more efficiently in the housing market made it:
A. easier to understand the true risk involved with these assets. B. more difficult to justify buying mortgage-backed securities over other low-risk assets. C. easier to keep everyone fully informed. D. more difficult to keep everyone fully informed.
Which of the following is an example of a negative externality?
A. A Japanese company begins to produce cars, which causes American workers to lose their jobs. B. An employee of a chemical company spills acid on his arm, causing severe damage. C. John plants fruit trees in his front yard, which attracts bees, which sting neighbor Mary. D. Sally buys coffee at McDonald's, spills some on her, and burns her arm.
The basic economic problem is essentially one of deciding how to make the best use of:
A. unlimited resources to satisfy limited economic wants. B. limited resources to satisfy limited economic wants. C. unlimited resources to satisfy unlimited economic wants. D. limited resources to satisfy unlimited economic wants.