The External Funds Needed (EFN) Equation Does Not Measure The

question 54

Multiple Choice

The External Funds Needed (EFN) equation does not measure the:

• A)additional asset requirements given a change in sales.
• B)additional total liabilities raised given the change in sales.
• C)rate of return to shareholders given the change in sales.
• D)net income expected to be earned given the change in sales.
• E)None of the above.

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Definitions:

Rational Expectations

The hypothesis that people form forecasts about the future based on all available information in an unbiased manner and learn from past mistakes.

Private Sector

The part of the economy that is owned and operated by individuals and private companies, not controlled by the government.

P

In economic terms, often stands for Price, which reflects the monetary cost of acquiring a good or service in the market.

Q

Often used to denote "quantity" in economic equations and models.