Suppose that a firm is currently earning revenues that are smaller than its total costs. The firm's managers are trying to decide whether or not the firm should shut down in the short run
On what information should the manager's decision be based?
The firm's decision should be solely based on whether its revenues from operating are sufficient to cover its variable costs. If they are, the firm should operate.
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Ted and Alice want to make sure that their children will inherit lots of money when they die, so that their children do not have to struggle the way they themselves did. Saving more in response to this is a______ reason for saving.
A. precautionary B. life-cycle C. bequest D. private
To reduce the principal-agent problem,
A) managers can take on more risk than they disclose to investors. B) managers can inflate profits on financial statements. C) boards-of-directors can tie the salaries of top management to the profitability of the firm. D) managers can hide liabilities by not disclosing them on financial statements.
Moving along an elastic portion of a demand curve, a small percentage change in price leads to a larger percentage change in quantity demanded
a. True b. False Indicate whether the statement is true or false
When actual output is less than potential output, there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; decrease B. a recessionary; increase C. an expansionary; increase D. a recessionary; decrease