What is the difference, if any, between physical capital and financial capital?
What will be an ideal response?
Physical capital refers to the actual tools, machinery, instruments, and buildings that have been produced in the past and are now being used to produce additional goods and services. Financial capital refers to the funds used to purchase the physical capital. Financial capital includes stocks and bonds.
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Under the unified Euro regime, the European countries control
A) fixed exchange rate only. B) monetary policy oriented toward domestic goals only. C) freedom of international capital movements only. D) monetary policy oriented toward domestic goals and freedom of international capital movements. E) fixed exchange rate and freedom of international capital movements.
Securitization is the process of
A) issuing stocks to finance capital spending. B) issuing bonds to finance purchases of equipment and structures. C) reducing risk by decreasing corporate debt loads. D) converting loans into securities.
In determining the optimal capital budget, one should choose those project's whose ____ exceeds the firm's ____ cost of capital
a. internal rate of return, average b. internal rate of return, marginal c. internal rate of return, historic d. average rate of return, marginal e. none of the above
Which of the following statements is correct?
a. A disadvantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers. b. A disadvantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit. c. A disadvantage of an Earned Income Tax Credit (EITC) is that a person who is unable to work due to a disability does not benefit from the program. d. All of the above are correct.