For which type of organization is unlimited liability likely to be the greater problem-proprietorships or partnerships? Why?
What will be an ideal response?
Unlimited liability probably poses more problems for partnerships because each partner is liable for debts incurred by the firm, even if those debts are incurred by the other partner. A proprietor knows all the debts he or she has taken on, but a partner could be in the dark on some occasions.
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When the Fed raises the federal funds rate,
A) the real interest rate is unchanged so investment and consumption expenditure are not changed. B) the real interest rate increases, thereby decreasing investment and consumption expenditure. C) the real interest rate falls, thereby increasing investment and consumption expenditure. D) investment and consumption expenditure increase, thereby raising the real interest rate. E) the real interest rate increases, thereby decreasing investment and increasing consumption expenditure.
The figure above shows an education market in which the government is providing households with vouchers. Excluding the voucher, what do the students pay the schools?
A) $4,000 B) $8,000 C) $12,000 D) $16,000 E) $0