When a person buys stock in a company, that person is buying ________, but when a person buys a bond in a company, that person is ________ the company.
A. debt; lending funds to
B. ownership; lending funds to
C. ownership; borrowing funds from
D. debt; borrowing funds from
Answer: B
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Firms that have high cost of monitoring, choose their employees much more carefully because
a. They are afraid that the employee would be too productive b. They are more confident that after getting the job, the employee would not shirk c. They are afraid that without screening, the employee would be more likely to shirk d. B & C
Figure 4-24
Refer to . The equilibrium price before the tax is imposed is
a.
P1.
b.
P2.
c.
P3.
d.
None of the above is correct.
Best National Bank operates with a 20 percent required reserve ratio, but has substantial excess reserves. One day a depositor withdraws $500 from his or her checking account at this bank. As a result, the bank's excess reserves:
A. fall by $500. B. fall by $400. C. rise by $100. D. rise by $500.
The Phillips curve shows
A. that an increase in government spending will decrease real national income. B. the relationship between the rate of interest and planned investment. C. that when inflation is higher, the unemployment rate falls. D. the relationship between the money supply and the price level.