The Amount of Owners' Equity in a Business Is Not

question 152

Multiple Choice

The amount of owners' equity in a business is not affected by:

• A) The percentage of total assets held in cash.
• B) Investments made in the business by the owner.
• C) The profitability of the business.
• D) The amount of dividends paid to stockholders.

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Definitions:

Equilibrium Quantity

The quantity of goods or services bought and sold at the equilibrium price, where demand equals supply.

Negative Externality

occurs when the production or consumption of a good or service imposes costs on third parties not directly involved in the transaction.

Government Intervention

Actions taken by a government to influence or regulate the economy or specific industries, often to correct market failures or promote social welfare.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market equilibrium price.