How does a firm raise external funds through direct finance?
What will be an ideal response?
With direct finance, funds flow from savers to firms, via the sale of stock or bonds, through financial markets, such as the New York Stock Exchange.
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Exports are positively related to domestic income and negatively related to the exchange rate
Indicate whether the statement is true or false
All of the following statements regarding the marginal revenue product (MRP) curve and the demand for labor are true EXCEPT
A) an individual firm's demand for labor is its MRP curve. B) under conditions of perfect competition, MRP equals marginal physical product multiplied by the product's price. C) an increase in the market demand for a given product decreases the product's price. D) the demand for labor is a derived demand.
Suppose consumer preference for organic corn starts to rise while the cost of growing organic corn continues to rise. In the market for organic corn, this would be represented by the equilibrium price ________ and the equilibrium quantity ________
A) increasing; increasing or decreasing B) decreasing; increasing or decreasing C) increasing or decreasing; increasing D) increasing or decreasing; decreasing
If the Fed buys $1 million in government securities from Bank A, then the immediate effect of this transaction is an increase in:
A. Money supply M1 B. Bank A's excess reserves C. Bank A's liabilities D. Bank A's required reserves