Companies issue stock because of all of the following except:
A. it allows the owners to raise capital without having to borrow.
B. it allows the owners to turn an illiquid asset into a liquid one.
C. it allows the owners to share the risk of failure.
D. it allows companies to file bankruptcy.
Answer: D
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Explain the logic of the multiplier effect
What will be an ideal response?
Two countries, Rhodia and Rubium, have identical production functions of the form:
Y = A × K0.25 × H0.75 Both countries have the same amount of capital stock and use the same technology. However, the total efficiency units of labor available in Rhodia is higher than that in Rubium. Which of the following is likely to be true in this case? A) The poverty rate in Rhodia is likely to be higher than that in Rubium. B) The gross domestic product of Rhodia is higher than that in Rubium. C) The gross domestic product of Rubium is higher than that in Rhodia. D) The Human Development Index of Rhodia is lower than that of Rubium.
In the figure above in the market for high-skilled labor, the equilibrium wage rate is
A) $16. B) $8. C) $20. D) $28.
If the labor supply curve is upward-sloping, an adverse supply shock causes ________ in employment and ________ in the real wage
A) no change, a decrease B) a decrease, a decrease C) a decrease, no change D) a decrease, an increase E) an increase, an increase