In what way do owners of stocks have limited liability?
What will be an ideal response?
Limited liability is the legal provision that shields owners of a corporation from losing more than they have invested in the firm.
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The natural rate of unemployment is defined as the rate of unemployment that
A) exists only during periods of recession or depression in the economy. B) exists due to welfare and unemployment benefits that reduce potential workers' incentives to find work. C) prevails in long-run macroeconomic equilibrium, when all workers and employers have fully adjusted to any changes in the economy. D) prevails in the short-run macroeconomic equilibrium, before workers and employers have had a chance to adjust to an economic shock.
The Banks of the Mississippi has excess reserves of $20,000, desired reserves of $80,000 and the desired reserve ratio is 5 percent. What is the total amount of deposits in this bank?
A) $180,000 B) $100,000 C) $1,000,000 D) $1,600,000 E) $5,000
The absence of barriers to entry in monopolistic competition means that in the long run, firms
A) earn an economic profit. B) earn zero economic profit. C) incur an economic loss. D) earn either an economic profit or zero economic profit. E) earn either zero economic profit or suffer an economic profit.
Due to adverse selection, very few lemons will be sold in the market for used cars
Indicate whether the statement is true or false