Your Friend Notices That U

question 138

Multiple Choice

Your friend notices that U.S.auto production and U.S.population growth have moved together over several decades.He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production.You gently point out to him that he:

• A)would be correct only when the economy was in a recession.
• B)has committed the fallacy that association is causation.
• C)has ignored the secondary effects.
• D)has committed the fallacy of composition.
• E)would be correct only when the United States enjoyed economic growth.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but retained by the company for reinvestment.

Dividends Declared

The announcement by a company's board of directors of the intention to pay a dividend to shareholders, indicating the amount and payment date.

Financial Position

A snapshot of a company's assets, liabilities, and equity at a specific point in time, illustrating its economic standing.

Statement of Income

A financial document outlining a company's revenues, expenses, and net income over a specific period.