One of the Main Tools Used by Economists to Measure

question 5

Multiple Choice

One of the main tools used by economists to measure the actual distribution of income is

• A)the Lorenz curve
• B)the Golden Rule
• C)the MR = MC rule
• D)the MRP = MRC rule
• E)the capital / labor ratio

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Definitions:

Salvage Value

The anticipated remaining worth of an asset when it reaches the end of its operational lifespan.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Working Capital

The difference between a company’s current assets and current liabilities, indicating the short-term financial health and operational efficiency.