What are the many different sources of funding to finance firms’ R&D expenditures? If an entrepreneur uses personal funds is there a cost for financing?
What will be an ideal response?
Several sources are available for financing firms’ R&D activities. The firm can borrow money from a bank. More established firms may be able to issue bonds to raise money for the venture. Profitable firms can also retain their earnings and use them to finance R&D expenditures. Smaller start-up firms may be able to obtain venture capital for a research project. Individual entrepreneurs may also use personal savings to finance the R&D for a new company. In this last case, the marginal cost of the financing using personal funds is the foregone interest rate.
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A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
In the Keynesian model, fluctuations in aggregate spending cause:
A. enhanced labor market mobility. B. changes in potential output. C. recessions and expansions. D. changes in average labor productivity.
In Figure 3-7, if we compare a move from point B to C with a move from point A to point B, we can see that
A. the opportunity cost of the move from B to C is higher than the opportunity cost of a move from A to B. B. the opportunity cost of the move from B to C is lower than the opportunity cost of a move from A to B. C. the opportunity cost of the move from B to C is equal to the opportunity cost of a move from A to B. D. the production possibilities frontier has a positive slope.
Of the following, ________ account(s) for the largest share of imports into the United States
A) food and drinks B) clothing and footwear C) crude oil D) computers E) chemicals