Which of the Following Was True of Many American Businesses

question 26

Multiple Choice

Which of the following was true of many American businesses in 1929?

• A) In anticipation of an economic downturn in the 1930s, they had significantly reduced their inventories.
• B) Having misrepresented their assets to obtain loans, they were overburdened with debt.
• C) They enjoyed relatively high profits because of the expansion of foreign markets.
• D) They incurred heavy losses of capital by shifting their investments from the United States stock market to less profitable European markets.

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Definitions:

Loanable Funds

Funds available for borrowing, which consist of household savings and international capital flows.

Compounded Annually

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods on an annual basis.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Withdrawals

Money or resources taken out from a system, economy, or savings for various purposes, reducing the total available amount.