The Recession of 2001 Appears to Have Been Mostly the Result

question 296

Multiple Choice

The recession of 2001 appears to have been mostly the result of decreased

• A) aggregate demand due to decreases in the money supply.
• B) aggregate demand due to falling stock prices and increased uncertainty.
• C) aggregate supply due to early retirements.
• D) aggregate supply due to changes in labor laws and decreased availability of natural resources.

---

Definitions:

Weighted Average Cost Of Capital

The average rate that a company is expected to pay to finance its assets, weighted according to the proportion of equity and debt in its capital structure.

Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Capital Structure

The mix of debt and equity financing a company uses to fund its operations and growth, affecting its risk profile and cost of capital.

MCC Curve

Stands for the Marginal Cost of Capital Curve, representing the cost of obtaining one more unit of capital.