Suppose a Hurricane Causes Extensive Devastation, Destroying Houses, Roads, Schools

question 99

Multiple Choice

Suppose a hurricane causes extensive devastation, destroying houses, roads, schools and factories. What would be the effect of this hurricane on a production possibilities frontier consisting of consumption goods and capital goods?

• A)It would shift outward at all points.
• B)It would shift inward at all points.
• C)There would be a movement along the existing production possibilities frontier towards a less capital-intensive point.
• D)There would be a movement along the existing production possibilities frontier towards a more capital-intensive point.
• E)There would be a movement from the existing production possibilities frontier inwards towards a point with unused or misallocated resources.

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Definitions:

Share Dilution

A reduction in existing shareholders' ownership percentage caused by the issuance of new shares.

Government Support

Financial or non-financial aid provided by the government to businesses, industries, or individuals in forms such as grants, loans, or tax incentives.

NCI

NCI, or Non-Controlling Interest, refers to the share of ownership in a subsidiary that belongs to shareholders other than the parent company.

Entity Method

An accounting technique used in consolidations, treating the parent and subsidiary as separate entities for the calculation of minority interest and consolidated net income.