Taking into Account the Upward-Sloping Short-Run Aggregate Supply Curve, the Short-Run

question 322

Multiple Choice

Taking into account the upward-sloping short-run aggregate supply curve, the short-run effect of an increase in government expenditure on real GDP is that

• A) real GDP increases by more in the short run than in the long run.
• B) real GDP increases by the same amount in the short run as in the long run.
• C) real GDP increases by less in the short run than in the long run.
• D) real GDP does not change in the short run because the price level increases.

Identify the characteristics that define a partnership as a legal entity.

Comprehend the implications of salary allowances on the division of net income in partnerships.

Understand the advantages and disadvantages of partnerships compared to corporations.

Recognize the factors involved in the formation and operation of a partnership.

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture, including market risk, credit risk, liquidity risk, and operational risk.

Variable Cost Ratio

This is a financial metric that represents the variable costs incurred as a percentage of sales, showing how much of each sales dollar is eaten by variable costs.

Degree of Total Leverage

The degree of total leverage measures the sensitivity of a company's net income to a change in sales, combining both operating and financial leverage effects.

Fixed Operating Costs

Expenses that remain constant regardless of the amount of output or sales, including rent, wages, and insurance premiums.