Which of the Following Would Increase the Likelihood That a Company

question 52

Multiple Choice

Which of the following would increase the likelihood that a company would increase its debt ratio,other things held constant?

• A)an increase in costs incurred when filing for bankruptcy
• B)an increase in the corporate tax rate
• C)an increase in the personal tax rate
• D)the company's stock price hitting a new low

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Definitions:

Expansionary Fiscal Policy

Government policy aimed at stimulating economic growth by increasing government spending, reducing taxes, or both.

Contractionary Monetary Policy

A monetary policy strategy used by central banks to reduce inflation and cool an overheating economy by increasing interest rates and reducing the supply of money.

Politicians

Individuals involved in politics, especially those holding or seeking office in government.

Fiscal Policy

Government policy relating to taxation and spending, used to influence economic conditions.