A ____ Federal Government Deficit Increases the Quantity of Loanable

question 30

Multiple Choice

A ____ federal government deficit increases the quantity of loanable funds demanded at any prevailing interest rate, causing an ____ shift in the demand schedule.

• A) higher; inward
• B) higher; outward
• C) lower; outward
• D) none of the above

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Definitions:

Capital Structure

Refers to the blend of debt, equity, and other financing sources used by a company to fund its operations and growth endeavors.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to reinvest in its core business or to pay debt.

Depreciation Expense

A method for allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Flotation Costs

The costs incurred by a company when it issues new securities, including underwriting fees, legal fees, and registration fees.