Limited liability can best be defined as the legal provision that
A) shields owners of a corporation from losing more than what they invested in a firm.
B) protects bond holders from being sued by other creditors.
C) gives holders of preferred stock priority over holders of common stock.
D) reduces the exposure of sole proprietorships to law suits.
A
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Exchange is necessary in an economy if: a. output is to be produced
b. output is to be consumed. c. individuals are self-sufficient. d. families are self-sufficient. e. labor is specialized.
Suppose that a U.S. dollar buys more gold in Australia than it buys in Russia. What does purchasing-power parity imply should happen?
If a central bank were required to target inflation at zero, then when there was a negative aggregate supply shock the central bank
a. would have to increase the money supply. This would move unemployment closer to the natural rate. b. would have to increase the money supply. This would move unemployment further from the natural rate. c. would have to decrease the money supply. This would move unemployment closer to the natural rate. d. would have to decrease the money supply. This would move unemployment further from the natural rate.
An appreciation of the U.S. dollar