In the Diagrams Below, the Subscript "1" Refers to the Initial

question 167

Multiple Choice

In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
Which diagram illustrates the effect on the natural-gas market of the widespread use of "fracking,"
Or hydraulic fracturing, by gas-drilling companies?

• A) A
• B) B
• C) C
• D) D

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Definitions:

Stated Value

A specified value assigned to no-par-value stock by the company's board of directors.

General Journal

A comprehensive accounting record where all financial transactions are initially recorded, using a double-entry accounting system.

Nonparticipating

typically refers to an insurance or investment product feature where the holder does not have the right to receive dividends or bonuses generated from the underlying pool of assets.

Par Value

The nominal or face value of a stock or bond, as stated by the issuing company, which may bear no relation to its market value.