The Invention of Machinery That Can Double the Amount of Gold

question 32

Multiple Choice

The invention of machinery that can double the amount of gold extracted from raw ore will likely:

• A)​raise the world price of gold to pay for the new machinery.
• B)​lower the world price of gold because any given amount can now be produced more cheaply.
• C)​raise the world price of gold because miners' wages must double as their productivity doubles.
• D)​lower the world price of gold only if new mining companies are not allowed to enter the industry.

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Definitions:

Direct Method

A way of presenting a cash flow statement where actual cash flow information from operating activities is disclosed.

Common Stock

A type of equity security that represents ownership in a corporation, providing voting rights, and entitling holders to a share of the company's success through dividends and/or capital appreciation.

Net Increase

The total growth in value or quantity after accounting for all additions and subtractions.

Stock Dividend

A payment to shareholders made in the form of additional shares rather than cash, often used by companies to conserve cash while still providing a dividend.