Which of the Following Statements Is FALSE

question 7

Multiple Choice

Which of the following statements is FALSE?

• A)The data show a clear preference for equity as a source of external financing for the total population of U.S.firms.
• B)Debt as a fraction of firm value has varied in a range from 30-45% for the average firm.
• C)Capital expenditures greatly exceed firms' external financing,implying that most investment and growth is supported by internally generated funds,such as retained earnings.
• D)Firms in growth industries like biotechnology or high technology carry very little debt,whereas airlines,auto makers,utilities,and financial firms have high leverage ratios.

---

Definitions:

Aggregate Demand

The total demand for all goods and services within a particular market or economy at a given overall price level and in a given period.

Real Exchange Rate

Measures the value of goods in one country compared to those in another, adjusting for price level differences.

Net Exports

The value calculated by subtracting a country's total value of imports from its total value of exports, which reflects a country's external trade balance.

Foreign-Currency Exchange

The process of exchanging one currency for another, determining how much one currency is worth in terms of another.