Consumers' ability to purchase a good or service is limited by:
A. their income only.
B. the prices for the goods or services only.
C. both the prices for the goods and services and their income.
D. their preferences.
Answer: C
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Which of the following shifts the supply of loanable funds curve?
A) change in investment demand B) change in "animal spirits" C) change in the real interest rate D) change in disposable income E) change in expected profit
__________ occurs because firms have an incentive to become riskier after their loans are funded
A) Moral hazard B) Adverse selection C) Manager-stockholder conflict D) Manager-lender conflict
The Fed is institutionally independent. A major advantage of this is that monetary policy
a. is subject to regular congressional scrutiny. b. will often offset fiscal policy. c. is not controlled by politicians. d. is usually coordinated with fiscal policy.
Which of the following financing tactics would most likely help an MNE avoid bankruptcy?
A) integrating e-commerce opportunities with domestic sales in order to maintain a steady balance of income and expenditures B) agreeing to forward contracts with customers and hedging purchases and sales on future currency rates C) organizing the capital structure so that the amount of debt financing is twice the level of equity financing D) keeping the percentage of debt in the capital structure to a level that can be managed even during difficult business conditions