Which of the Following Statements Is a Correct Interpretation of Some

question 63

Multiple Choice

Which of the following statements is a correct interpretation of some economists' views?

• A) When the incomes of the poor are increased, the poor purchase more goods and services, and this causes lower profits.
• B) When the government gives income to the head of a household, other members of the household remain in need.
• C) When the rich do well, the total pie is increased so much that the benefits that trickle down to the poor are greater than the proceeds they would get from redistribution.
• D) When the rich do well, the total pie is decreased, so that the poor are worse off than they were before.

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Definitions:

NPV

Net Present Value is the difference between the current value of cash inflows and the current value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Simulation Analysis

A combination of scenario and sensitivity analyses.

Capital Budgeting

The process by which investors and managers decide which long-term projects or investments a business should undertake, based on potential profitability.

What-If Questions

Scenario-based queries used to assess the impact of potential changes or decisions in a given situation.