What does limited liability mean?
A) The owners of the business are personally responsible for paying expenses incurred by the business.
B) Only employees can have a claim on the assets of the business.
C) The personal assets of the owners cannot be used to pay the firm's debts if the business is bankrupt.
D) Anybody with a liability against a firm can claim only what their liability refers to.
Answer: C
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Ricardian equivalence suggests that government budget deficits generated by decreases in current taxes
A) increase the current account surplus. B) decrease the current account surplus. C) have no effect on the current account surplus. D) have unpredictable effects on the current account surplus.
In economics, a free rider is the term used for a person who
a. receives the benefit of a good without contributing to its costs of production. b. purchases an item during a "buy one, get one free" sale. c. lives in a town in which the city provides free bus service. d. pays for exactly what they receive.
In the United States, where there is a permanent increase in the money supply, exchange rate overshooting is caused in part by:
a. higher domestic interest rates. b. an appreciation of the dollar. c. lower foreign interest rates. d. a depreciation of the dollar.
Exhibit 6-3 Unemployment categories CategoryWorkers Frictional unemployment250 Structural unemployment350 Cyclical unemployment600 Discouraged workers400 Underemployment450 According to data in Exhibit 6-3 and assuming the total number of workers is 8,400, the civilian labor force is:
A. 7,550. B. 8,000. C. 8,400. D. 8,800.