Retained earnings are
A) the funds held back to pay out dividends.
B) the funds used to pay corporate taxes.
C) profits not given out to stockholders.
D) the reason there is double taxation.
C
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If the production possibilities frontier of one trade partner ("Country A") is bowed out (concave to the origin), then increased specialization in production by that country will
A) increase the economic welfare of both countries. B) increase the economic welfare of only Country A. C) decrease the economic welfare of Country A. D) decrease the economic welfare of Country B. E) not affect the economic welfare of either country.
Fiscal policy is most effective when exchange rates are fixed
Indicate whether the statement is true or false
If you were a rational expectations economist, you would argue that the goal for economic policy is to
a. discover the NAIRU and make sure the actual rate of unemployment doesn't fallbelow it b. discover a way to lower unemployment to two percent without inflation c. keep the inflation rate below 10 percent d. maintain inflation at 3 percent and unemployment at 4 percent e. maintain unemployment at 3 percent and inflation at 4 percent
A firm that responds to a regulatory rule in a way that permits technical compliance while allowing the firm to violate the spirit of the regulation has.
A. reduced the scope of the lemons problem. B. engaged in a creative response to regulation. C. shared the gains and pains of regulation. D. become a captured regulator.