Which Factor Made It Difficult for Major Industries to Hold

question 84

Multiple Choice

Which factor made it difficult for major industries to hold the line against inflation in the 1970s?

• A) The quality of manufactured products increased, causing production costs to increase.
• B) Higher labor costs accompanied a decline in productivity.
• C) The supply of manufactured goods outstripped the demand for goods.
• D) Corporate tax rates tripled during the decade.

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Definitions:

Unamortized Discount

The portion of a bond's issue price that is below its face value and has not yet been amortized over the life of the bond.

Unamortized Premium

The portion of a bond premium that has not yet been amortized or gradually written off over the life of the bond.

Installment Note

A debt instrument that requires a series of periodic payments (installments) of principal and interest over a specific period until the debt is paid off.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used in the discounting of future cash flows to understand their value in present terms.