Which of the Following Would Be an Example of Capital

question 149

Multiple Choice

Which of the following would be an example of capital formation?

• A)The purchase of government bonds
• B)An initial public offering by a technology company
• C)The acquisition of a domestic company by a foreign country
• D)The expansion of a grocery store into a rural area

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Definitions:

Share

A unit of ownership in a company or financial asset that represents a proportionate claim on its assets and earnings.

Partial Excludability

Characteristic of a good whereby it is difficult but not impossible to prevent people from using it, often seen in semi-public goods.

Dividend Income

Revenue received from owning shares in a company that pays out profits to its shareholders.

Taxable Income

The amount of income subject to tax, after deductions and exemptions.