When you own part of a company and share in its profits, we say that you have:
A. equity in that company.
B. credit with that company.
C. intermediary stock in that company.
D. financial diversification in that company.
A. equity in that company.
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Suppose a sole proprietorship is earning total revenues of $100,000 and is incurring explicit costs of $75,000. If the owner could work for another company for $30,000 a year, we would conclude that:
A) the firm is incurring an economic loss. B) implicit costs are $25,000. C) the total economic costs are $100,000. D) the individual is earning an economic profit of $25,000.
Profit is the return to entrepreneurship
a. True b. False Indicate whether the statement is true or false
In the classical model, what happens to the level of real GDP if aggregate demand increases?
A. Real GDP would increase at first, then decrease. B. Real GDP decreases. C. Real GDP increases. D. Real GDP would remain the same, at equilibrium.
When the Federal Reserve sells a government security to a commercial bank
A. the cash reserves of the commercial bank decrease. B. the loans of the commercial bank will increase. C. the balance sheet of the commercial bank is thrown off balance. D. the net worth of the commercial bank increases.