In Order to Explain the Changing Gap in Earnings Between

question 46

Multiple Choice

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

• A)compensating differentials.
• B)the increased recognition that a larger stock of human capital usually leads to higher earnings.
• C)technological progress.
• D)the decreasing importance of international trade.

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Definitions:

Horizontal Analysis

An accounting method that compares financial data across multiple periods to identify trends and growth patterns.

Trend Analysis

The practice of collecting information and attempting to spot a pattern or trend in the data, commonly used in financial analysis, market research, and operational management.

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Payout Ratios

Payout ratios indicate the proportion of earnings a company pays to its shareholders in the form of dividends, usually expressed as a percentage of net income.