The Expansion of Information Technology and the Increasing Complexity of the Economy

question 60

Multiple Choice

The expansion of information technology and the increasing complexity of the economy should make the wage premium

• A)continue rising.
• B)continue falling.
• C)rise.
• D)fall.

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Definitions:

Degree of Operating Leverage

A measure that quantifies the percentage change in a company's operating income resulting from a percentage change in its sales volume.

Net Operating Income

The profit a business makes after subtracting operating costs, yet prior to removing interest and tax expenses.

Contribution Margin Ratio

The contribution margin ratio measures the percentage of sales revenue remaining after covering variable costs, contributing to covering fixed costs and generating profit.

Net Operating Income

A metric that calculates a company's profit after subtracting operating expenses but before interest and taxes are deducted.