Leverage is thought to be:
A. a dangerous tool, especially for big companies who do not understand its risk.
B. the most widely used of hedging risk in markets.
C. the single reason for the Great depression.
D. a relatively riskless strategy used by companies to grow quickly.
A. a dangerous tool, especially for big companies who do not understand its risk.
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In the simple deposit expansion model, a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed
A) sold $200 in government bonds. B) sold $500 in government bonds. C) purchased $200 in government bonds. D) purchased $500 in government bonds.
The equilibrium price level and the equilibrium level of real GDP are jointly determined by the intersection of the economy’s aggregate supply and aggregate demand schedules.
Answer the following statement true (T) or false (F)
Internal costs are
A) costs borne solely by the individuals who incur them. B) costs borne by people in the same society as those who incur them. C) costs borne by people working in the firm that incurs them. D) costs that are incurred by the producers but buyers do not pay for them.
Comparing two countries' nominal GDP over time is likely to be misleading if one wants to determine whether standards of living are better in one country because
A. NDP instead of GDP should be used. B. the figures must be adjusted for different types of currency. C. the figures must be adjusted for price changes and population differences. D. the figures must be adjusted to account for production differences.