If MRP > MLC, the firm
a. is employing the optimal quantity of labor
b. should decrease the quantity of labor it employs
c. should lower the wage rate
d. should increase the quantity of labor it employs
e. should raise the wage rate
D
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Which of the following statements concerning the shareholder wealth maximization model is (are) true?
a. The timing of future profits is explicitly considered. b. The model provides a conceptual basis for evaluating differential levels of risk. c. The model is only valid for dividend-paying firms. d. a and b e. a, b, and c
A contractionary monetary policy is most likely to reduce output with little impact on inflation when the economy
A. is near full employment and the aggregate supply curve is horizontal. B. is near full employment and the aggregate supply curve is vertical. C. has substantial unemployment and the aggregate supply curve is vertical. D. has substantial unemployment and the aggregate supply curve is horizontal.