Additional Funds Needed (AFN) Will Be Negative If

question 25

Multiple Choice

Additional funds needed (AFN) will be negative if:

• A) assets that can be acquired only in large, discrete amounts are acquired.
• B) the plant and equipment of the firm is increased to achieve additional growth.
• C) the amount of internal financing expected is decreased because of an increase in operations of the firm.
• D) there are economies of scale in the use of many types of assets.
• E) the amount of internally generated funds is more than sufficient to support the forecasted increase in sales.

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Definitions:

Nominal GDP

Nominal Gross Domestic Product refers to the market value of all final goods and services produced within a country in a given period, measured in current market prices.

Expansionary Monetary Policy

A monetary policy strategy used by central banks to increase the money supply to stimulate economic growth, typically by lowering interest rates.

Aggregate Expenditure

The total spending on final goods and services in an economy over a specific time period, including consumption, investment, government purchases, and net exports.

Unemployment

The condition of being jobless and actively seeking employment, often measured as a percentage of the labor force.