Which of the following is not true of a change in dividend payments?
A. There is no substitution effect because a change in dividend payments does not change a household's permanent income.
B. There is no income effect because a change in dividend payments does not change a household's permanent income.
C. There is no income effect because a change in dividend payments does not change the trade-off between work and leisure.
D. all of the above
Answer: D
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Non-activists believe that the IS curve is
A) very flat and that real output is sometimes very sensitive to monetary policy in the short run. B) very steep and that real output is sometimes very sensitive to monetary policy in the short run. C) very flat and that real output is not sensitive to monetary policy in the short run. D) very steep.
The demand curve for loanable funds slopes down because
A) at lower bond prices more loanable funds will be supplied. B) lower interest rates reduce the inflation rate. C) an increase in the interest rate makes borrowers more willing and able to demand more funds. D) a decrease in the interest rate makes borrowers more willing and able to demand more funds.
During a sustained economic expansion,
a. the rate of unemployment will generally fall and the employment/population ratio will generally rise. b. the rate of unemployment will generally rise and the employment/population ratio will generally fall. c. both the rate of unemployment and the employment/population ratio will generally decline. d. both the rate of unemployment and the employment/population ratio will generally rise.
Suppose the prices of agricultural products such as corn and soybeans increase. What is the effect of these price increases on the marginal product of the 1,000th farm worker? What is the effect on the value of the marginal product of the 1,000th farm worker?