As the Recession of 2007-2008 Loomed Over Both Large and Small

question 84

Multiple Choice

As the recession of 2007-2008 loomed over both large and small businesses, many firms looked for ways to deleverage. The term deleveraging implies that:

• A) the firms avoided equity financing.
• B) the firms borrowed money at lower interest rates.
• C) the firms bought back their own stock to reduce the stock outstanding.
• D) the firms replaced much of the debt in their capital structure with equity.

---

Definitions:

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment, a key indicator of economic health.

Job Market

The market in which employers search for employees and employees search for jobs; it reflects the demand and supply of labor.

Equity

Fairness or justice in the way people are treated or in the distribution of resources; also refers to ownership interest in a company through stocks.

Sales Tax

A tax imposed by governments on the sale of goods and services, typically a percentage of the retail price.