How do unlimited and limited liability differ?
What will be an ideal response?
Unlimited liability means that if a firm is bankrupt, lenders can take the owner's personal wealth. Limited liability means that the owner can lose only what is invested in the firm.
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The "Great Moderation" refers to ________
A) sharp declines in asset prices B) the long economic expansion of the 1960s C) the mild economic recoveries of the 1970s and early 1980s D) the "oil tax" of the 1970s E) none of the above
A sudden rise in the market demand in a competitive industry leads to
a. A short run market equilibrium price lower than the original equilibrium b. A market equilibrium lower than the short run price c. Some firms exiting the market d. All of the above
According to the Added Perspective in the text, a new cost-effective vaccine for chickens can be expected to have what effect on the Malaysian production possibilities curve and why?
a. increase, because it is a technological innovation b. decrease, because it will cause a loss of jobs for farmers c. increase, because capital will decrease as less is needed d. decrease, because fewer chickens will survive with the vaccine e. decrease, because the vaccine is very costly
A lower interest rate makes more investment projects feasible, meaning that
a. there is a direct relationship between the rate of interest and the quantity of investment spending b. there is an inverse relationship between the rate of interest and the quantity of investment spending c. there is no relationship between the rate of interest and the quantity of investment spending d. the demand curve for investment spending is horizontal e. the demand curve for investment spending is vertical