Which of the following would be a disadvantage of the partnership form of business?
a. limited liability
b. too many products
c. unlimited liability
d. profits flow directly to the one person responsible for creating it
e. one person must make all of the important managerial decisions
C
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Analyze the following statement, and show what would happen in the long run if such advice were followed by the Fed: "The increase in the stock market has increased people's wealth. As a result, their consumption has increased, increasing aggregate demand and output. So the Fed needs to increase the money supply, since with higher income, people's demand for real money balances will be higher."
What will be an ideal response?
Wages and salaries are examples of:
A. consumption. B. labor income. C. profits. D. capital income.
Redistributing income from the rich to the poor creates inefficiency because
A) of wasteful expenditures by people receiving welfare grants. B) of the administrative costs to operate the government redistribution agencies. C) the redistribution creates an incentive to produce less output. D) Both answers B and C are correct. E) Both answers A and C are correct.
The systemic costs and burdens that inflation imposes upon a society are almost entirely the result of
A) government price controls. B) inability to predict its rate and timing. C) the fact that no one can ultimately gain from higher prices because everyone is a consumer. D) the lag between the rise of wage costs and the subsequent rise of prices. E) the lag between the rise of prices and the subsequent rise of wages.