A Corporation Purchased 1,000 Shares of Its Own $5 Par

question 53

Multiple Choice

A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

• A) $0
• B) $5,000
• C) $2,500
• D) $10,000

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Definitions:

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Government Expenditures

The total amount spent by the government for its operations, public services, and social welfare programs.

Aggregate Spending

The total spending on goods and services in an economy at a given overall price level and in a given time period.

Marginal Propensity

The ratio of change in an economic variable, such as consumption or saving, to a change in another, like income.