Which of the Following Is Considered a Good/safe Rule-Of-Thumb Debt

question 62

Multiple Choice

Which of the following is considered a good/safe rule-of-thumb debt ratio for businesses?

• A)0.8 or below
• B)0.6 or below
• C)1.0 or above
• D)1.5 or above

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Definitions:

Used Cars

Used cars that have already been registered and operated by at least one previous owner.

Marginal Products

The additional output resulting from the increase of one unit of a specific input, holding all other inputs constant.

Separating Equilibrium

Separating equilibrium refers to a situation in a market, often under conditions of asymmetric information, where different types of people choose different strategies, revealing their type.

Pooling Equilibrium

A situation in a market where all types of customers receive the same offer or treatment from a seller because the seller cannot distinguish between different types of customers.