Consider the Following Statements About the Signaling Hypothesis of Education

question 220

Multiple Choice

Consider the following statements about the signaling hypothesis of education: a. The signaling hypothesis of education is based on the idea that college graduates are more productive than non-college graduates.
B. The signaling hypothesis of education suggests that firms rely on human capital requirements to ensure worker quality.
C. Employers rely on certain signals, such as a college diploma, to gauge a potential employee's abilities because it could lower the cost of acquiring information about the person that is not easily observed.
Which of the statements above is true about the signaling hypothesis of education?

• A) a, b, and c
• B) a and b only
• C) b and c only
• D) a and c only

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Definitions:

Dividends Paid

The portion of a company's earnings that is distributed to shareholders, typically in the form of cash or additional shares.

Voting Shares

Shares that give the shareholder the right to vote on matters of corporate policy and the election of the board of directors.

Carrying Value

The book value of an asset on a company’s balance sheet, calculated as its original cost minus accumulated depreciation or amortization.

Voting Shares

Another term for voting equity interests, specifically referring to shares that allow the shareholder to vote on corporate decisions.