The greatest advantage of a corporation is
A) ease of setting up the business.
B) the double taxation of dividends.
C) separation of ownership and control of the business.
D) limited liability.
Answer: D
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The rational expectations perspective suggests that:
A. fiscal policy is more powerful than monetary policy. B. monetary policy is more powerful than fiscal policy. C. fiscal and monetary policy are not likely to achieve their stated aims. D. fiscal policy works only to the extent that it is accompanied by fully anticipated changes in the money supply.
Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks. Funsters should
a. “fight fire with fire” by decreasing supply of its doll for 6 weeks and then increasing the supply.
b. increase the supply of their doll now before the other doll hits the market.
c. increase the price of their doll now.
d. discontinue their doll.