Many workers hold large amounts of stock issues by the firms in which they work (in...

Many workers hold large amounts of stock issues by the firms in which they work (in accorance with government rules). Why do you belive companies encourage this type of behavior, but cannot do this with intermediate products such as mutual funds? Why might a worker NOT wish to hold the stock in the company that employs them, even though neither the worker nor the company is planning to end the employment relationship? Disscuss this in terms of loanable funds market principles, taxes and productivity.

Solutions

Expert Solution

Companies encourage long termstock options ro ensure employee retention and decrease employee acquisition cost and also keep costs hirng and thus promoting development and grooming.

Companies cannot recommends nutual funds as if lacks symmetrical information and lacks utilities. However workers may wish not to hold assuming prices will crash and thus sellout to market margins and make profits enormously and save taxes.

This can create recessionary impacts and thus slowdown in economic growth as lonable funds decrease due to rise in interest rates.

Rahul Sunny answered 2 years ago

Next > < Previous

Related Solutions

You work for a relatively large company in which many of your co-workers need to make presentations and sales pitches to customers and clients.

You work for a relatively large company in which many of your co-workersneed to make presentations and sales pitches to customers and clients.Management is not happy with the way the employees have been delivering thesepresentations and sales pitches. Because of your experience with publicspeaking, you have been asked to conduct a workshop to enhance the skills ofyour co-workers. Identify and discuss three or more important concepts orpractices that might help them. Be specific and use clear and detailed examplesto illustrate...

Describe wage determination in a labor market in which workers are unorganized and many firms actively compete for the services of labor.

Describe wage determination in a labor market in which workers are unorganized and many firms actively compete for the services of labor. Show this situation graphically, using W1 to indicate the equilibrium wage rate and Q1 to show the number of workers hired by the firms as a group. Show the labor supply curve of the individual firm and compare it with that of the total market. Why are there differences? In the diagram representing the firm, identify total revenue,...

3. In the US economy, nearly half of all workers employed by private firms work at...

3. In the US economy, nearly half of all workers employed by private firms work at the 0.3% of firms that have 500 or more employees. a. What does this relationship mean for the power relationship between large firms and the labor force? b. What do you think these large firms having such a market share of labor means for labor prices (wages)? c. Can you propose a policy that would counteract this power imbalance?

1. In the decision of how many workers to hire, economic models assume firms are trying...

1. In the decision of how many workers to hire, economic models assume firms are trying to… Select one: a. Do what is best for their community b. Maximize the number of jobs they can create c. Minimize the number of workers and maximize the amount of capital d. Maximize their profits 2. An example of a public good would be: Select one: a. Automobiles b. Housing c. Military protection d. College 3. An externality occurs when: Select one: a....

Many firms complain that they cannot find qualified workers, according to a study of more than...

Many firms complain that they cannot find qualified workers, according to a study of more than 6,000 executives. New research shows that more than 65 per cent of companies do not have programs designed to build skills for future needs. Only 16 per cent said they support employees who want to seek the training themselves. At the other end of the career path, only about half of executives surveyed said their firms help older workers transition to new roles. Sixteen...

Workers are compensated by firms with “benefits” in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance.

Workers are compensated by firms with “benefits” in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $30 per hour and in addition received health benefits at the rate of $6 per hour. Also suppose that by 2010 workers at that plant were paid $31.5 per hour but received $13.5 in health insurance benefits. a. By what percentage did total compensation (wages plus...

Race, Ethnic, Culture, and Class Issues Social workers in Minneapolis have discovered that many of their...

Race, Ethnic, Culture, and Class Issues Social workers in Minneapolis have discovered that many of their Somali American clients are using a substance called “khat,” a leaf that includes an amphetamine. Some of these clients report that they use it so that they can “talk more easily.” The social workers are concerned that khat produces a severe depression, but they do not know what the real dangers are. What recommendations would you make to the social workers about dealing with...

1) There are many private security firms, and many large housing developments have police protection provided by...

1) There are many private security firms, and many large housing developments have police protection provided by such private firms. Few towns, though, contract out their police departments Why do you think this is so? What would be the advantages and disadvantages of doing so?

In the US economy, nearly half of all workers employed by private firms work at the 0.3% of firms that have 500 or more employees.

In the US economy, nearly half of all workers employed by private firms work at the 0.3% of firms that have 500 or more employees.What does this relationship mean for the power relationship between large firms and the labor force?What do you think these large firms having such a market share of labor means for labor prices (wages)?Can you propose a policy that would counteract this power imbalance?

An engineer is designing a product in which a copper wire will carry large amounts of...

An engineer is designing a product in which a copper wire will carry large amounts of electricity. The resistive heating of a 66 g copper wire is expected to add 550 J of heat energy during a 10-minute operating cycle. By what percentage does the volume increase because of the temperature increase? (Note: Remember to always use unrounded values in calculations then round final answers to the correct significant figures.) You may use the following information about copper to answer...

Subjects