The Difference Between Market Demand and Aggregate Demand Is That

question 61

Multiple Choice

The difference between market demand and aggregate demand is that:

• A) Market demand applies to all individuals,and aggregate demand does not.
• B) Aggregate demand applies to a specific good,and market demand does not.
• C) Policy levers work through market demand but not aggregate demand.
• D) Aggregate demand applies to all goods and market demand applies to a specific good.

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Definitions:

Cost of Capital

Represents the rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Capital Rationing

The process of selecting profitable projects under the constraint of limited available investment funds.

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, calculated as the discount rate that makes the net present value of all cash flows from the investment equal to zero.

Hurdle Rate

Hurdle Rate is the minimum acceptable return on investment or project that a business requires before it considers it viable or proceeds with it.