In General, as Productivity Levels Decrease, the Potential for Productivity

question 50

Multiple Choice

In general, as productivity levels decrease, the potential for productivity growth

• A)decreases.
• B)increases.
• C)remains the same.
• D)decreases if GDP decreases.

---

Definitions:

Preferred Stock

A security that is similar to bonds in some respects and to common stock in others. Preferred dividends are similar to interest payments on bonds in that they are fixed in amount and generally must be paid before common stock dividends can be paid. If the preferred dividend is not earned, the directors can omit it without throwing the company into bankruptcy.

After-Tax Figure

The amount of money left after all applicable taxes have been subtracted from the gross or total amount.

Taxable Income

The amount of income that is used to calculate how much tax an individual or a company owes to the government.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company to be reinvested in its core business or to pay debt.