David Ricardo's Iron Law of Wages Stated That

question 72

Multiple Choice

David Ricardo's iron law of wages stated that

• A)wages would rise as competition eliminated inefficient producers.
• B)wages would decline as productivity drove prices down.
• C)wages would fall when the population of workers increased.
• D)wages would rise as workers organized into unions.
• E)wages were irrelevant; only commodities like pig iron mattered.

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Definitions:

Cash Inflows

Money or funds coming into a business or project, often as revenue, financing, or investment.

Cash Outflows

Money going out of a business, including expenses, investments, and distributions to shareholders.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Replacement Chain

A decision analysis tool used to choose between mutually exclusive projects with differing durations by comparing the equivalent annual annuity.