Gabrielle Borrows $1,000 from Frank to Pay for School and Gives

question 12

Multiple Choice

Gabrielle borrows $1,000 from Frank to pay for school and gives Frank a note for that amount. Frank wants Gabrielle's father to sign as an accommodation party. Gabrielle's father signs below Gabrielle's signature on the fall of the note. Which of the following statements is true of this case?

• A) Only Gabrielle has primary liability as a maker.
• B) Only Gabrielle's father has primary liability as an accommodation maker.
• C) Gabrielle and her father have the same contractual liability.
• D) Gabrielle has primary liability, and her father has secondary liability.

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Definitions:

Resource Prices

The costs associated with acquiring the inputs or factors of production, such as labor, capital, and natural resources.

Output Increased

A scenario where production levels rise due to enhanced efficiency, greater demand, or improvements in labor and capital.

Increasing-Cost Industry

An industry in which expansion through the entry of new firms raises the prices firms in the industry must pay for resources and therefore increases their production costs.

Long-Run Supply Curve

As it applies to macroeconomics, a supply curve for which price, but not real output, changes when the demand curves shifts; a vertical supply curve that implies fully flexible prices.