The amount of output that would be produced by an economy if resources were being utilized at a high rate that is sustainable in the long run is referred to as the

A. potential output.
B. natural output.
C. Walrasian output.
D. partial-equilibrium output.


Answer: A

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Holding everything else the same, if a corporation's earnings rise, then the default risk on its bonds will ________ and the expected return on those bonds will ________

A) increase; decrease B) decrease; decrease C) increase; increase D) decrease; increase

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In a multiple regression analysis involving 40 observations and 4 independent variables, SST = 375 and SSE = 75 . The multiple coefficient of determination is:

a. 0.8333. b. 0.8000. c. 0.1875. d. 0.9375.

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When Congress passed a criminal statute called the "Gun-Free School Zones Act," the Supreme Court ruled that

A. the law was valid as a proper exercise of the power to regulate interstate commerce. B. the law was void for vagueness; thus, it was not valid. C. the law was not valid since Congress exceeded its power under the Commerce Clause. D. although the law was not a proper exercise of the power to regulate interstate commerce, Congress had the power to create such legislation on other grounds. Therefore, the statute was valid.

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An electing S corporation has a $30,000 ordinary loss for the nonleap year. On January 1, Beverly and Sonya own equally all of the S corporation stock. On the 146th day of the year, Beverly gives her one-half of the S corporation stock to her daughter Becky. How much of the $30,000 ordinary loss is allocated to Beverly?

A) $25,000 B) $15,000 C) $6,000 D) $5,959

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