Southwest Airlines wants to raise $20 million to finance the renovation of their corporate offices, and the company wishes to raise the funds through direct finance. Which of the following methods could it use?
A) It could issue $20 million in stocks.
B) It could sell $20 million in bonds.
C) It could borrow $20 million from a bank.
D) It could choose either A or B.
Answer: D
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Expansionary policy only leads to inflation, but does not raise output in ________
A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory
A country can actually improve its well-being if it is in a position to impose a non-zero "optimal tariff." Explain what an optimal tariff is, what conditions must be in place to implement an optimal tariff, and how such a tariff will increase national welfare. Assuming a country could impose an optimal tariff, would you suggest it do so? Justify your answer.
What will be an ideal response?
A price cut will decrease the revenue a firm receives if the demand for its product is
A. elastic. B. inelastic. C. unit elastic. D. straight elastic.
If price exceeds average variable cost but is less than average total cost, a firm
A) should shut down. B) should further differentiate its product. C) should stay in business for a while longer until its fixed costs expire. D) is making some profit but less than maximum profit.