All of the following are characteristics of stock except
A) stock does not represent a promise to repay a fixed amount of funds.
B) dividends paid to owners of stock represent a firm's profits.
C) stock promises to repay a fixed amount to of funds to stock owners.
D) stock represents ownership in a firm.
Answer: C
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If you save more because Social Security motivates you to provide a greater level of inheritance for your children, then this is referred to by economists as the
A. slovenly effect. B. bequest effect. C. asset substitution effect. D. induced retirement effect.
The above figure shows a graph of the market for pizzas in a large town. At a price of $5, there will be
A) excess demand. B) excess supply. C) equilibrium. D) zero demand.
When policy makers are deciding where to place the statutory incidence of a tax, it is helpful to remember that:
A. it will have no effect on the economic incidence of the tax. B. the economic incidence will fall to the more-elastic party. C. it will largely determine the economic incidence of the tax. D. it will have a large impact on efficiency of the tax.
In the United States, the purchasing power of money is determined by
a. the underlying precious metals that back each unit of currency. b. the value of U.S. treasury bonds that back each unit of currency. c. Federal Reserve policy, which controls the money supply. d. Congress, which controls the money supply.