Assume Individuals Consider Only the Short- Run Effects of Changes

question 42

Multiple Choice

Assume individuals consider only the short- run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose current government spending increases and that individuals expect future government spending to increase. Given this information, we know with certainty that:

• A) the current output effects are ambiguous.
• B) the current interest rate will decrease.
• C) current output and the current interest rate will both increase.
• D) the current interest rate will increase.
• E) current output will increase.

Understand the significance and calculation of liquidity ratios and their implications on a firm's inventory management.

Comprehend the function and importance of market value ratios in evaluating a firm's past performance and future prospects.

Grasp the variability and impact of financial ratios in analyzing a firm's asset utilization and financial leverage.

Recognize the limitations and potential misinterpretation of financial ratios when used without considering industry norms and seasonal variances.

---

Definitions:

Goal Setting

The establishment of clear, specific, measurable, achievable, relevant, and time-bound objectives, often considered crucial for successful personal and organizational planning.

Job Enrichment

A method of motivating employees by enhancing the quality and variety of their job tasks, thereby making their work more rewarding and engaging.

Herzberg's Two Factors

A theory that suggests job satisfaction and dissatisfaction are influenced by two independent sets of factors—motivators (such as achievement and recognition) and hygiene factors (such as salary and working conditions).

Dissatisfiers

Factors related to work or the workplace environment that can lead to dissatisfaction among employees, potentially affecting their job performance and overall morale negatively.