Why do school districts sell bonds to the public when they are financing a new school building program rather than sell stock?
What will be an ideal response?
School districts sell bonds for these types of expenditures because the assets will have a long life and the bond can be paid back over time. They don't sell stock because school districts are typically not corporate entities but rather run by the government. Selling stock would imply that the holders of the stock have ownership in the "company" and a claim on its profits. Since school districts are not companies and don't make profits it is more appropriate to sell bonds to finance these expenditures.
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Elimination of the corporate income tax would ________ government saving and probably ________ private business saving
A) increase, increase B) increase, decrease C) decrease, increase D) decrease, decrease
Suppose a large tree on Adam's property blocks Eve's view of the ocean. Adam accepts Eve's offer of $15,000 to cut down the tree. This is an example of
A) internalizing externalities via voluntary agreements. B) a result of logrolling. C) a consequence of a positive externality. D) a consequence of private costs exceeding social costs.
If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then
a. a one-unit increase in output will increase the firm's profit. b. a one-unit decrease in output will increase the firm's profit. c. total revenue exceeds total cost. d. total cost exceeds total revenue.
Labor economists sometimes refer to labor demand as "derived" demand. In this context, where does "derived" come from?
A. consumer demand for the firm's product B. the degree of competition in the firm's industry C. the firm's profit D. the firm's production function E. the union's willingness to accept a lower wage