Which of the Following Statements Is Not True About Trading

question 110

Multiple Choice

Which of the following statements is not true about trading on the equity?

• A)It can become a disadvantage to a corporation.
• B)It is another phrase for financial leverage.
• C)It will increase the number of shares of stock owned.
• D)It will increase the interest a corporation must pay.

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Definitions:

Government Subsidy

Financial assistance provided by the government to businesses, individuals, or other governmental units in support of an activity deemed beneficial to the public.

Supply

The total amount of a product or service that is available to consumers, determined by factors such as price, production costs, and market demand.

Allocative Efficiency

A state of the market where resources are allocated in a way that maximizes the net benefit to society, ensuring that every good or service is produced up to the point where the last unit provides a benefit equal to its cost of production.

Productive Efficiency

A situation where the economy or a production process is unable to produce more of one good without reducing the production of another good, using available resources in the best way.