According to the Signaling Hypothesis

question 268

Multiple Choice

According to the signaling hypothesis,

• A) signaling about job openings occurs in help wanted classified ads.
• B) a college diploma signals to employers that a person has certain desirable characteristics.
• C) a slowdown in output signals to companies the need to hire more labor.
• D) a high unemployment rate is a signal to the government to take some policy action.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the United States to govern financial reporting.

Financing Provided

Funds supplied to businesses or individuals for the purpose of investing, expansion, or operating expenses that are expected to be repaid in the future.

Retained Earnings

The segment of net profits that are not distributed as dividends, instead kept within the company for reinvestment in its main operations or for debt repayment.

Current Asset

A slightly different term for assets likely to be used or turned into cash within one fiscal year or operating cycle, emphasizing liquidity.