Owners of a Corporation Share in the Profits of the Firm

question 69

Multiple Choice

Owners of a corporation share in the profits of the firm

• A)by selling any bonds or stocks owned and realizing a capital gain.
• B)through coupon payments on that firm's bonds.
• C)through dividend payments on shares of that firm's stock.
• D)by raising the interest rate on bonds.

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Definitions:

Linear

Describes a relationship or function that represents a straight line when graphed, indicating a constant rate of change.

Positive Economics

The branch of economics that concerns the description and explanation of economic phenomena, focusing on facts and cause-and-effect relationships without making judgments.

Normative Economics

The branch of economic analysis that makes prescriptions about the way the economy should work.

Allocatively Efficient

A situation where resources are distributed in a way that maximizes the net benefit to society, often where marginal cost equals marginal benefit.