The Trade Feedback Effect Includes All of the Following Steps

question 34

Multiple Choice

The trade feedback effect includes all of the following steps EXCEPT

• A)an increase in U.S.economic activity stimulates U.S.imports.
• B)an increase in foreign imports stimulates U.S.exports.
• C)an increase in U.S.exports stimulates U.S.economic activity.
• D)an increase in foreign income stimulates U.S.imports.

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Definitions:

Effective Tax Rate

The average percentage of one's total income paid in taxes, factoring in all deductions and credits.

Capital Structure

The mix of a company's debt, equity, and other sources of financing used to fund its operations and growth.

Cost of Capital

The minimum return that a business needs to generate on its projects to preserve its marketplace value and draw in financing.

Flotation Costs

Expenses incurred by a company in issuing new stocks or bonds, including underwriting, legal, and registration fees.