A Change in Monetary Policy Affects

question 54

Multiple Choice

A change in monetary policy affects

• A)consumption expenditure,government expenditures on goods and services,and net exports.
• B)consumption expenditure,investment,and net exports.
• C)investment,government expenditures on goods and services,and net exports.
• D)consumption expenditure,productivity,and net exports.
• E)government expenditures on goods and services because it affects the government's budget balance.

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Definitions:

Debt-Equity Ratio

A financial comparison indicating the relationship of debt to equity in financing a company’s assets.

WACC

A calculation of a firm's cost of capital in which each category of capital is proportionately weighted, used to evaluate investment opportunities.

Flotation Costs

Flotation costs are the total costs incurred by a company in issuing new securities, including underwriting fees, legal fees, and registration fees.