From 1982 to 2000, the Relative Wage of Nonproduction to Production

question 102

Multiple Choice

From 1982 to 2000, the relative wage of nonproduction to production workers in U.S. manufacturing and their share of total employment in U.S. manufacturing increased. One logical explanation would be:

• A) that their wages fell in real terms.
• B) that there was a decrease in demand for skilled workers.
• C) that due to increased productivity or demand for products, there was a relative increase in demand for skilled workers.
• D) that minimum wage increases shifted the demand for workers toward skilled workers.

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Definitions:

Required Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Market Capitalization Rate

The expected rate of return on a portfolio consisting of all publicly traded stocks, used as a measure to value a company's stocks based on the market’s expectations of its future earnings.

Earnings Retention Ratio

A financial metric indicating the percentage of a company's net earnings that is not paid out as dividends, but instead retained for reinvestment.

Excluding Growth Opportunities

The omission or overlooking of potential future projects or investments that could lead to an increase in company value.