With respect to business types, what does the term 'limited liability' mean?
What will be an ideal response?
Limited liability is a legal provision that shields owners of a corporation from losing more than they have invested in the firm. Corporations face limited liability. Sole proprietorships and partnerships face unlimited liability.
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The interest rate on Baa corporate bonds is ________, on average, than interest rates on Treasuries, and the spread between these rates became ________ in the 1970s
A) lower; smaller B) lower; larger C) higher; smaller D) higher; larger
The principal advantage of the game theory approach is that it allows us to
a. take all possible information into consideration before developing a theory b. better understand why the firm in a competitive industry avoids games c. better understand how the government should regulate a natural monopoly d. better understand decision making when one person's choices affect another person's choices e. understand the relationship between the firm and the industry demand curves
Which of the following is the most liquid asset?
a. A classic art painting. b. A commercial building. c. A savings bond d. A checking account balance e. Gold
If U.S. interest rates rise while foreign interest rates remain unchanged,
a. GDP will not change since the shift in aggregate supply cancels the positive effects on aggregate demand. b. the dollar will depreciate and thus reduce prices and output. c. foreign capital will be attracted to the United States and the dollar will appreciate. d. net exports will increase and the economy will expand.