Hard Rationing Is Defined as the Situation That Exists When

question 20

Multiple Choice

Hard rationing is defined as the situation that exists when a company:

• A) Has no projects with positive net present values.
• B) Has more projects with positive net present values than it wishes to fund.
• C) Cannot raise capital for new projects under any circumstances.
• D) Allocates certain funds to each business unit for capital budgeting.
• E) Has two mutually exclusive projects with the same internal rate of return.

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Definitions:

Money Supply

Money supply refers to the total amount of money in circulation within an economy, including cash, coins, and balances held in checking and savings accounts, which can influence inflation, interest rates, and economic growth.

Money Expansion

An increase in the total supply of money in an economy, often by central banking actions.

Rapid Growth

A phase of economic expansion characterized by a significant increase in the GDP, income, and employment.

Inflation Targets

specific and publicly announced goals for the annual rate of inflation that central banks aim to achieve over a particular time frame.