A Business Organized as a Corporation

question 181

Multiple Choice

A business organized as a corporation

• A) is not a separate legal entity in most countries.
• B) requires that shareholders be personally liable for the debts of the business.
• C) is owned by its shareholders.
• D) terminates when one of its original shareholders dies.

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Definitions:

Crowding Out

A situation in which increased government spending leads to a reduction in private sector spending and investment.

Contractionary Gap

A situation where an economy's real GDP is lower than its potential GDP, indicating underutilization of resources.

Cyclically Balanced

An economic situation where fiscal policy is designed to be neutral over the business cycle, allowing for temporary deficits or surpluses but aiming for a long-term balance.

Federal Deficits

The financial situation in which a government's expenditures exceed its revenues within a given fiscal year, leading to borrowing or the issuance of debt.