When the Level of Working Capital Is Increased, All of the Following

question 63

Multiple Choice

When the level of working capital is increased, all of the following are expected to occur except

• A)expected profitability decreases
• B)expected profitability increases
• C)risk decreases
• D)none of these

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Definitions:

Positive Externalities

Benefits that are enjoyed by a third-party or the society at large, as a result of an economic transaction.

Socially Optimal Level

The socially optimal level is the quantity of production or consumption where the marginal social cost equals the marginal social benefit, maximizing overall welfare.

Policymakers

Individuals or groups responsible for making decisions and establishing regulations that guide the economic, social, and political governance of a society.

Marginal Benefit

The plus in satisfaction or usefulness someone gets by consuming an extra unit of a given product or service.