When Government Policies Are Enacted

question 47

Multiple Choice

When government policies are enacted,

• A)equality can usually be enhanced without an efficiency loss,but efficiency can never be enhanced without a reduction in equality.
• B)efficiency can usually be enhanced without a reduction in equality,but equality can never be enhanced without an efficiency loss.
• C)it is always the case that either efficiency and equality are both enhanced,or efficiency and equality are both diminished.
• D)None of the above are correct.

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Definitions:

Unlevered Return

The return on an investment that has not been adjusted for the effects of leverage or borrowing.

Total Firm Value

The overall value of a company, including both equity (market capitalization) and debt levels, used in business valuation and financial analysis.

Unlever

The process of reducing the level of debt in a company's capital structure, either by paying off debt with equity or with profits generated from operations.

Lend Out

The act of providing a loan or capital to another party with the expectation of being repaid, often with interest.