Answer: D. limit the amount of fixed-payment obligations.
The purpose of the restrictive debt covenant that prohibits borrowers from entering into certain types of leases is to
A. ensure a cash shortage does not cause an inability to meet current obligations.
B. prevent liquidation of assets through large salary increases of key employees.
C. protect the lender by controlling the risk and marketability of the borrower's security investments alternatives.
D. limit the amount of fixed-payment obligations.
Economics
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If the dollar-yen exchange rate changes from $1 = 125 yen to $1 = 100 yen, then
a. exports to Japan will likely decrease. b. Japanese tourists will be more likely to visit the United States. c. U.S. businesses will be more likely to use Japanese shipping lines to transport their products. d. U.S. consumers will be more likely to buy Japanese-made automobiles.
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If the unemployment rate rises, which policies would both be appropriate to reduce it?
a. increase taxes, increase government spending b. increase taxes, decrease government spending c. decrease taxes, increase government spending d. decrease taxes, decrease government spending
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Typically, the unemployment rate ________ during a recession and ________ during an expansion.
A. rises; does not change B. rises; falls C. rises; rises even more D. falls; rises
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According to the Laffer curve, a decrease in the tax rate will increase tax revenue
A. if the economy is at the farthest point out on the curve. B. if the economy is on the negatively sloped section of the curve. C. no matter the location of the economy on the curve. D. if the economy is on the positively sloped section of the curve.
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