Which of the Following Statements Concerning External Sources of Financing

question 70

Multiple Choice

Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are true?

• A) Issuing marketable securities is the primary way that they finance their activities.
• B) Bonds are the least important source of external funds to finance their activities.
• C) Stocks are a relatively unimportant source of finance for their activities.
• D) Selling bonds directly to the American household is a major source of funding for American businesses.

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Definitions:

Demographic Transition

A theory describing the transition from high birth and death rates to lower birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Demographic Transition

A model describing the transformation of birth and death rates from high to low levels in a society over time, typically associated with economic development.

Resource Demand

The requirement for raw materials, labor, and other inputs needed by businesses to produce goods and services.

Operating Costs

Expenses associated with the day-to-day functioning of a business, such as rent, utilities, and payroll.