In Determining Wages, Ability, Effort, and Chance

question 178

Multiple Choice

In determining wages, ability, effort, and chance

• A)probably play no role whatsoever.
• B)play a role, but their importance is hard to gauge since ability, effort, and chance are hard to measure.
• C)play a role, and that role is fully captured in easy-to-measure factors such as human capital and age.
• D)play a role, and it is fully explained within the context of compensating differentials.

---

Definitions:

Future Value

The predicted amount of money that an investment will grow to at a specified future date, based on an assumed rate of growth.

Interest Rate

A lender's price to a borrower for the asset's usage, quantified as a percentage of the main sum.

Cash Flows

The movement of funds in and out of a business, determining its operating, investing, and financing activities' liquidity.

Lottery Prize

A financial reward won in a lottery, typically involving a large cash sum or valuable goods.