In Every Economic System, Choices Must Be Made Because Resources

question 100

Multiple Choice

In every economic system, choices must be made because resources are:

• A)infinite, but economic wants are finite.
• B)finite, but economic wants are insatiable.
• C)unlimited, but economic wants are limited.
• D)limited, and so are economic wants.

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Definitions:

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Debt Financing

Debt Financing involves raising capital through borrowing money that must be repaid over time, with interest.

Cost of Capital

The return a company needs to earn on its investment projects to maintain its value and attract funds.

Financial Decision Makers

Individuals or groups responsible for making investment, financing, and dividend decisions within a company.