The Decline in the Average Number of Hours Worked Over

question 16

Multiple Choice

The decline in the average number of hours worked over the last century from 60 hours to 40 hours can be explained as a consequence of

• A) an increase in nonlabor income shifting labor supply to the left.
• B) an increase in nonlabor income shifting labor supply to the right.
• C) a decrease in the demand for labor.
• D) an improved understanding of the importance of sleep to labor productivity.

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Definitions:

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Net Present Value

An economic metric that evaluates the gap between the present value of cash inflows and outflows across a designated period.

Cash Flow Estimates

Projected amounts of cash inflows and outflows over a certain period that help businesses plan for investments, operational needs, and debt repayment.

Payback Rule

A capital budgeting technique that calculates the time required to recoup the cost of an investment, focusing on cash flows without considering the time value of money.