A Firm Has Several Options Available to It in Times

question 18

Multiple Choice

A firm has several options available to it in times of financial distress.The firm may:

• A)reduce capital and R & D spending.
• B)raise new funds by selling securities or major assets.
• C)file for bankruptcy.
• D)negotiate with lenders.
• E)All of the above statements are true.

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Definitions:

Common Fiscal Policy

A coordinated approach by multiple governments or entities to manage tax policies, government spending, and public debt to influence economic conditions.

Tariffs and Quotas

Government-imposed regulations where tariffs are taxes on imported goods, and quotas are limits on the amount of a product that can be imported.

Smoot-Hawley Tariff Act

Legislation passed in 1930 that established very high tariffs. Its objective was to reduce imports and stimulate the domestic economy, but it resulted only in retaliatory tariffs by other nations.

Global Trade War

A situation where countries impose tariffs or other trade barriers on each other in response to trade disputes, leading to reduced international trade.