AWPhillips Collected Data on the Rate of Change in Money

question 75

Multiple Choice

A.W.Phillips collected data on the rate of change in money wages and plotted it against unemployment rates in the United Kingdom.The curve he fit to the data showed that

• A) the rate of change of money wage rates and unemployment rates were inversely related.
• B) the rate of change of money wage rates and unemployment rates were directly related.
• C) the rate of change of money wage rates and unemployment rates were independent.
• D) as money wage rates increased,the unemployment rate was cut in more than half.

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Definitions:

Stock Warrants

Financial instruments that give the holder the right to purchase the issuer's stock at a specified price before a specified date.

Compensation Expense

Costs associated with the wages, salaries, and benefits provided to employees, recorded on the income statement.

Service Period

The period of time over which employee services are rendered in exchange for an award, common in the context of stock compensation plans.

Stock Option Plan

A compensation scheme in which employees are given the option to purchase company stock at a discounted price, often used to align employees' interests with those of the shareholders.