Productivity in Service-Related Businesses Has Not Grown as Rapidly as in Manufacturing

question 55

Multiple Choice

Productivity in service-related businesses has not grown as rapidly as in manufacturing businesses because service businesses are ______.

• A) more capital intensive
• B) more labor intensive
• C) less labor intensive
• D) more expensive to operate

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Definitions:

Capital Structure

The mix of the three capital components (debt, preferred stock, and equity) used by a firm. The optimal capital structure is the structure at which stock price is maximized, all other things held equal. Also see Target capital structure.

Equity

The value of an ownership interest in property, including shareholders' equity in a company.

Tax Deductible

Expenses that can be subtracted from gross income, lowering the taxable income and thus the amount of tax owed.

Investor's Perspective

The viewpoint or considerations of an individual or entity actively investing or planning to invest in markets, focusing on potential risks and returns.