Which of the Following Statements Concerning External Sources of Financing

question 52

Multiple Choice

Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are true?

• A) Stocks are a far more important source of finance than are bonds.
• B) Stocks and bonds, combined, supply less than one-half of the external funds.
• C) Financial intermediaries are the least important source of external funds for businesses.
• D) Since 1970, more than half of the new issues of stock have been sold to American households.

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Definitions:

Scarce Resources

Raw materials, labor, and capital that are limited in availability, requiring societies to make decisions on their allocation and use.

Unit-Costs

Expenses a firm faces for producing, holding, and marketing one unit of a given product or service.

Restricts Trade

Actions or policies implemented by governments or economic entities to limit or control the exchange of goods and services across borders.

Specialization of Production

The process in which individuals, firms, or countries focus on producing a limited range of goods or services to gain economies of scale or advantages by virtue of unique skills, resources, or technology.