Based on the Factors That Influence a Country's Cost of Capital

question 15

Multiple Choice

Based on the factors that influence a country's cost of capital, the cost of capital in less developed countries is likely to be ____ than in the United States and ____ than in Japan.​

• A) ​higher; higher
• B) ​higher; lower
• C) ​lower; lower
• D) ​lower; higher

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a specific period accounting for changes in price level.

Trade Deficits

A situation where a country's imports of goods and services exceed its exports, resulting in a net outflow of domestic currency to foreign markets.

Real GDP

Gross Domestic Product adjusted for inflation, which reflects the value of all goods and services produced by an economy in a given year in base-year prices.

Price Level

The average price point of the entirety of goods and services in the economic scope.