Economists Novy-Marx and Rauh Contend That If Boston Wanted to Adequately

question 11

Multiple Choice

Economists Novy-Marx and Rauh contend that if Boston wanted to adequately fund its pension systems for its public workers it would have to put on

• A)a one-time tax of nearly $31,000 per household.
• B)a one-time tax of nearly $310,000 per household.
• C)an annual tax of nearly $31,000 per household.
• D)an annual tax of only $31 per household.

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Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, like lease payments, wages, and insurance fees.

Operating Cash Flow

A measure of the cash generated by a company's regular business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Fixed Costs

Expenses that do not change with the level of production or sales activity, such as rent, salaries, and insurance.

Cash Break-even

The point at which a business's cash inflows match its cash outflows, meaning the business is making just enough to cover its cash operating expenses.