Which of the Following Is True Under the Uniform Commercial

question 94

Multiple Choice

Which of the following is true under the Uniform Commercial Code regarding the liability of a principal to an agent if the agent enters into a contract that is a negotiable instrument?

• A)The principal is liable to the same extent as if no negotiable instrument were involved because the negotiable instrument has no effect on the principal's liability.
• B)The principal cannot be held liable unless the principal's name is on the instrument.
• C)The principal cannot be held liable unless the agent's signature indicates that it was made in a representative capacity.
• D)The principal cannot be held liable unless the principal's name is on the instrument or the agent's signature indicates that it was made in a representative capacity.
• E)The principal cannot be held liable unless the principal's name is on the instrument,the agent's signature indicates that it was made in a representative capacity,or the agent has been adjudicated insolvent.

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Definitions:

Accelerator Effects

The phenomenon where an increase in national income leads to a proportionally larger increase in investment spending, magnifying the initial rise in income.

Automatic Stabilizer

Economic policies and programs, such as unemployment insurance and taxation, that automatically adjust to counteract economic fluctuations without the need for government intervention.

Money Market

A section of the financial market where short-term financial assets with high liquidity are traded.

Interest Rate

The amount charged by lenders as a percentage of the principal, or the amount earned on deposits over a specified period.