Which of the Following Statements Is False

question 3

Multiple Choice

Which of the following statements is false?

• A) The matching principle indicates that the firm should finance permanent working capital with short-term sources of funds.
• B) Following the matching principle should, in the long run, help minimize a firm's transaction costs.
• C) In a perfect capital market, the choice of financing is irrelevant; thus how the firm chooses to finance its short-term cash needs cannot affect value.
• D) A portion of a firm's investment in its accounts receivable and inventory is temporary and results from seasonal fluctuations in the firm's business or unanticipated shocks.

Describe the policymaking process using a specific policy example.

Understand the historic roles played by the U.S. government in reducing unemployment.

Comprehend how the Federal Reserve Board influences the U.S. economy and how its influence compares to that of the president.

Analyze the causes and consequences of the federal budget deficit, along with potential measures for its reduction.

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Definitions:

Congressional Ban

A congressional ban is a prohibition or restriction imposed through legislation passed by the U.S. Congress.

Lobbying

The act of attempting to influence the actions, policies, or decisions of officials in their professional capacity, typically by interest groups or individuals.

Unintended Consequences

Outcomes that are not the ones foreseen or intended by a purposeful action, often contrary to what was originally planned.

Interest Group

An interest group is an organization that advocates for specific policies or issues, seeking to influence public policy and decision-making.