Which of the Following Statements Is Correct

question 50

Multiple Choice

Which of the following statements is correct?

• A)A corporation receives a monetary payment every time its shares of stock are traded by stockholders on organized stock exchanges.
• B)When a corporation sells bonds as a means of raising funds it is engaging in debt finance.
• C)A share of stock is an IOU.
• D)The two most important financial markets in the economy are the stock market and financial intermediaries.

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Definitions:

Decreasing-Cost Industry

An industry characterized by a downward-sloping long-run supply curve, indicating lowering costs as industry output increases.

Increasing-Cost Industry

An industry in which production costs increase as output expands, often due to scarce resources or rising input prices.

Industry Expands

The process of a sector in the economy growing due to an increase in demand, production, and often, employment.

Allocative Efficiency

A state of the economy where the distribution of resources among different uses is optimal, ensuring that the goods being produced are what consumers prefer the most.