The Change in Aggregate Demand That Results from Fiscal Expansion

question 121

Multiple Choice

The change in aggregate demand that results from fiscal expansion changing the interest rate is called the

• A)multiplier effect.
• B)crowding-out effect.
• C)accelerator effect.
• D)Ricardian equivalence effect.

Apply the appropriate cost of capital for evaluating capital budgeting projects based on funding sources.

Recognize the bases for the component costs of capital.

Compare the cost of external equity with the cost of retained earnings and understand flotation costs.

Evaluate the conditions under which retained earnings should be considered the first source of capital.

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Definitions:

Societal Utility

The degree to which something meets the needs and contributes to the well-being or benefit of society.

Means of Production

The physical and non-physical inputs used in the production of goods and services, such as factories, machinery, and labor.

Duty-Based Ethics

A moral philosophy that emphasizes the adherence to a set of rules or duties as the basis for ethical behavior.

Mission Statements

Formal summary statements that define the purpose, goals, and values of an organization or company.