Which of the Following Is the Most Likely Result If

question 12

Multiple Choice

Which of the following is the most likely result if an agent admits to the principal that a check for the principal was forged by the agent and placed into the agent's bank account, but the principal does nothing until two months later after the agent leaves town with the funds?

• A) Because the checks were forged, the principal can receive reimbursement of the funds from any maker involved or any bank that cashed the checks.
• B) The principal can receive reimbursement from makers of the checks only.
• C) The principal can receive reimbursement from any bank that cashed the checks only.
• D) It is likely that it will be determined that the principal ratified the signatures and that the principal cannot recover from either makers or banks that cashed the checks.
• E) The principal can recover from either the makers or any banks who cashed the checks only if it can be shown that the agent cannot be located for criminal prosecution.

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Definitions:

Inverse Demand Function

A representation of demand that expresses price as a function of quantity, rather than the conventional demand function which expresses quantity demanded as a function of price.

Price Elasticity

Measures the responsiveness of quantity demanded or supplied to a change in price.

Wealth

The abundance of valuable resources or valuable material possessions, including the total of all financial assets minus any liabilities.

Price Elasticity

A measure in economics that shows how the quantity demanded of a good or service responds to a change in its price.