The cost of capital can be thought of as the rate of return required by investors in the firm's securities
a. true
b. false
a
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According to the Keynesian model, the short-run aggregate supply (SRAS) curve is horizontal when
A) prices react to an aggregate demand shock but real Gross Domestic Product (GDP) does not. B) there are no unemployed resources and wages do not change when prices change. C) there are unemployed resources and prices do not fall when aggregate demand falls. D) real Gross Domestic Product (GDP) is at full capacity but prices are not flexible.
Refer to Figure 6.1. Assume that L1 represents the budget line before a price change. The income effect is shown by the movement:
A. from bundle A to bundle C.
B. from bundle A to bundle B.
C. from bundle B to bundle C.
D. from bundle C to bundle B.
In-kind transfers include the direct transfer of
A. Goods and services rather than cash. B. Cash rather than goods. C. Education rather than housing. D. Cash rather than medical services.
Which one of the following would be most compatible with the goals of the government to both improve economic growth and reduce the trade deficit?
What will be an ideal response?