The owners of preferred stock
A. are the original owners of the corporation.
B. receive preferential treatment in the payment of dividends.
C. have the same rights as bondholders.
D. have the same voting rights as owners of common stock.
Answer: B
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When firms become so large that they have to add additional layers of management and decision making becomes more cumbersome,
a. economies of scale are said to occur b. marginal cost begins to fall in the short run c. marginal cost begins to rise in the short run d. the long-run average total cost curve is flat e. the long-run average total cost curve slopes upward
The country is experiencing rapid inflation. What could the Fed do reduce the money supply and slow inflation?
a. buy government bonds b. lower the reserve ratio c. sell government bonds d. lower the discount rate
The U.S. economy in 2009 was characterized by an excess level of output. This corresponds to a recessionary gap.
Answer the following statement true (T) or false (F)
A lender of last resort can prevent the spread of financial crises
Indicate whether the statement is true or false