If a Large Decrease in the Cost of Capital Leads

question 41

Multiple Choice

If a large decrease in the cost of capital leads to a firm increasing the labor it uses

• A)then the output effect outweighs the substitution effect.
• B)the substitution effect outweighs the output effect.
• C)the substitution and output effects are equal.
• D)there is no way to determine the relative strengths of the output and substitution effects.

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Definitions:

Testosterone

is a steroid hormone primarily produced in the testes of males and the ovaries of females, responsible for the development of male secondary sexual characteristics.

Y Chromosome

One of the two chromosomes that determine sex; in males, one member of the 23rd pair of chromosomes is Y.

Male or Female Genitalia

The sexual and reproductive organs specific to males (penis, scrotum, etc.) and females (vagina, ovaries, etc.).

Y Chromosome

A sex chromosome found in mammals, including humans, that is typically associated with male characteristics and is paired with an X chromosome in males.