Suppose That Consumers Choose to Smoke Less and Chew Gum

question 459

Multiple Choice

Suppose that consumers choose to smoke less and chew gum more. Tobacco companies cut back on the number of people they employ while chewing gum manufacturers employ more. This is an example of

• A)structural unemployment created by efficiency wages.
• B)structural unemployment created by sectoral shifts.
• C)frictional unemployment created by efficiency wages.
• D)frictional unemployment created by sectoral shifts.

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Definitions:

Indirect Method

A financial reporting approach used primarily for cash flow statements that adjusts net income for changes in non-cash accounts to calculate cash flow from operating activities.

Cash Dividends

Payments made by a company to its shareholders out of its profits or reserves.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Free Cash Flow

The amount of cash generated by a business after accounting for operational expenses and capital expenditures, indicating financial health and liquidity.