________ Can Trigger a Recession

question 100

Multiple Choice

________ can trigger a recession.

• A) An increase in autonomous expenditure
• B) A decrease in autonomous expenditure
• C) Equality between aggregate expenditure and real GDP
• D) An increase in the expenditure multiplier
• E) An increase in induced expenditure

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Definitions:

Optimal Capital Structure

The most favorable blend of debt and equity financing that minimizes a company's cost of capital while maximizing its market value.

Stock Price

The current price at which a share of a company is traded on the stock market.

Optimal Capital Structures

The best mix of debt, equity, and other financial instruments that minimizes the cost of capital for a company while maximizing its value.

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, which also increases the risk of loss.