Some Economists Argue That a Rise in the Interest Rate,brought

question 150

Multiple Choice

Some economists argue that a rise in the interest rate,brought about by a rise in government borrowing in the loanable funds market to finance a budget deficit,brings in foreign funds in search of the higher interest rate return.This,in turn,dampens the rise in the interest rate.If this is true as far as it goes,there will be __________ crowding out than there would be if foreign funds did not flow into the country.

• A) more
• B) less
• C) the same amount of
• D) none of the above

Understand and calculate the cost of equity using different models (e.g., Dividend Discount Model, CAPM).

Calculate the market capitalization of a firm and understand its significance.

Calculate and interpret a firm’s debt-equity ratio and its implications on WACC.

Understand the relationship between beta, market risk premium, risk-free rate, and the cost of equity.

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Definitions:

Wheelchair

A chair mounted on wheels designed for the use of a person who is unable to walk due to illness, injury, or disability.

Unsure

Feeling doubtful or lacking confidence in something or someone; not certain.

Independent

Free from outside control; not depending on another's authority or an organization for financial or other support.

Mental Health

A state of well-being in which an individual realizes their own abilities, can cope with normal stresses of life, can work productively, and is able to make contributions to their community.