In 1990, Amber Corp., a closely held corporation, was formed by Adams, Frank, and Berg as incorporators and stockholders. Adams, Frank, and Berg executed a written voting agreement which provided that they would vote for each other as directors and officers. In 1994, stock in the corporation was offered to the public. This resulted in an additional 300 stockholders. After the offering, Adams holds 25%, Frank holds 15%, and Berg holds 15% of all issued and outstanding stock. Adams, Frank, and Berg have been directors and officers of the corporation since the corporation was formed. Regular meetings of the board of directors and annual stockholders meetings have been held.For this question refer to the formation of Amber Corp. and the rights and duties of its stockholders, directors, and officers. Amber Corp.'s day-to-day business ordinarily would be operated by its:
Answer(s): C
Choice "c" is correct. Stockholders have no day-to-day control; management power of a corporation is vested in the directors, but they usually delegate day-to-day management duties to the officers.
In 1990, Amber Corp., a closely held corporation, was formed by Adams, Frank, and Berg as incorporators and stockholders. Adams, Frank, and Berg executed a written voting agreement which provided that they would vote for each other as directors and officers. In 1994, stock in the corporation was offered to the public. This resulted in an additional 300 stockholders. After the offering, Adams holds 25%, Frank holds 15%, and Berg holds 15% of all issued and outstanding stock. Adams, Frank, and Berg have been directors and officers of the corporation since the corporation was formed. Regular meetings of the board of directors and annual stockholders meetings have been held.For this question refer to the formation of Amber Corp. and the rights and duties of its stockholders, directors, and officers.
Choice "c" is correct. Shareholders in a voting agreement must vote their shares in accordance with the agreement. There is no requirement that majority shareholders be elected as directors or officers.Business Cycles and Reasons for Business Fluctuations
An increase (shift right) in aggregate demand causes:
Answer(s): A
Choice "c" is correct. As shown above, an increase in aggregate demand causes the equilibrium price level to rise and equilibrium output (real GDP) to increase. Choice "a" is incorrect. As shown above, equilibrium output increases, not decreases. Choice "b" is incorrect. As shown above, the equilibrium price level increases, not decreases. Choice "d" is incorrect. As shown above, the equilibrium price level increases, not decreases.
The trough of a business cycle is generally characterized by:
Choice "c" is correct. The trough of a business cycle is an economic low point with no positive indicators for the future. It is characterized by unused productive capacity and an unwillingness to risk new investments.Choice "a" is incorrect. Shortages may occur during a peak. Choice "b" is incorrect. Increasing purchasing power and increasing capital investments come with recovery.Choice "d" is incorrect. Declining purchasing power comes with inflation; unlikely in a trough.
During a recession:
Choice "c" is correct. During a recession, potential output (real GDP) will exceed actual output (real GDP).Choice "a" is incorrect. Real GDP is falling during a recession. Choice "b" is incorrect. The natural rate of unemployment will not be affected by the various phases of the business cycle. Actual unemployment will change with the cycle. Choice "d" is incorrect. Actual output will not exceed potential output except at the peak of the cycle, and perhaps not then.
Post your Comments and Discuss AICPA CPA-Business exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the CPA-Business content, but please register or login to continue.