Why do most large firms incorporate rather than operate as sole proprietorships or partnerships?
Most large firms incorporate because they gain limited liability for the actions of the firm. Proprietors and
partners are personally liable for the debts of their businesses, whereas owners of corporations are not.
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In the foreign exchange market, which of the following results in a movement along the supply curve of dollars?
A) a change in the expected future exchange rate B) a change in the U.S. interest rate C) a change in the current exchange rate D) None of the above answers are correct.
The above figure shows the demand and supply curves in the market for milk. Currently the market is in equilibrium. If the government imposes a $2 per gallon tax to be collected from sellers, estimate the change in p, Q, and social welfare
What will be an ideal response?
Which of the following is an example of automatic fiscal policy?
A) The government deliberately raises taxes. B) The government deliberately lowers taxes. C) The government deliberately increases spending. D) The government deliberately decreases spending. E) none of the above
In a 100-percent-reserve banking system, if people decided to decrease the amount of currency they held by increasing the amount they held in checkable deposits, then
a. M1 would increase. b. M1 would decrease. c. M1 would not change. d. M1 might rise or fall.