Paul has started a small software company and has used his personal savings and personal loans from banks and relatives so far. However, a substantial amount of money is still needed to fund expansion if Paul's company is to have a chance to grow and succeed. Briefly describe four different sources of capital, and explain which one you think Paul will use.
What will be an ideal response?
One option is a bank, which takes deposits and lends the money to borrowers. In the stock market, people who invest in stocks go through stockbrokers and investment banks to supply capital to the companies that sell shares. In the bond market, borrowers sell bonds to investors. The bonds obligate the issuers to make regular interest payments, followed by repayment of the principal. Venture capital firms supply funds to risky start-up companies. Paul is likely to use venture capital from a venture capital firm to raise further money. Venture capital firms specialize in funding small start-up companies, which are too small and risky for large bank loans, bonds, or stocks.
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A) external benefit. B) marginal private benefit. C) private cost. D) social cost. E) marginal social benefit.
The F-test is used in forecasting to
A) establish confidence intervals for testing regression coefficients. B) examine the degree of multicollinearity among independent variables. C) determine how well a regression equation can account for dependent variable values. D) determine whether an identification problem exists.
A primary objective of unions is to raise the wages of union members.
Answer the following statement true (T) or false (F)
How are total output and total income related to each other, and why?
What will be an ideal response?