The main advantage of a corporate form of organization is that
A. shareholders have unlimited liability.
B. all corporate profits must be distributed as dividends.
C. shareholders have limited liability.
D. shareholders are not subject to double taxation.
Answer: C
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Consider a perfectly competitive market experiencing good times. In the short run, the equilibrium price will ________ and firms will earn a(n) ________
A) increase; economic profit as the new price exceeds average total cost B) increase; normal profit as the new price exceeds average total cost C) decrease; economic loss as new firms enter the industry D) decrease; economic profit as firms exit the industry E) may increase or decrease; normal profit depending on their costs
An increase in expected inflation is likely to cause
A. no change in the demand for real balances. B. no change in the demand for real balances only if the income elasticity of real money demand is zero. C. a decline in the demand for real balances. D. an increase in the demand for real balances.
In 2015, Janice Quinn sells a five-year-old car to Used Car, Inc. for $6,000. In the same year, Used Car, Inc. resells the car to Hilda Goner for $6,500. What is the contribution of these transactions to GDP in the year 2015?
A. $6,000 B. $12,500 C. $500 D. $0
In the simple Keynesian model, if output exceeds aggregate expenditures,
a. there will be no response from businesses. b. inventories will decrease and businesses will increase output. c. inventories will increase and businesses will increase output. d. inventories will increase and businesses will decrease output.