The Real Burden of an Increase in the Public Debt

question 68

Multiple Choice

The real burden of an increase in the public debt:

• A)may be very small or conceivably zero when the economy is in the midst of a severe depression.
• B)will be smaller when full employment exists than it will when the economy has large quantities of idle resources.
• C)can be shifted to future generations if the debt is internally financed.
• D)can best be measured by the dollar increase in the size of the debt.

Learn how the project's risk level influences its required rate of return.

Recognize the importance of the cost of capital in evaluating investment opportunities.

Appreciate the concept of capital structure weights and their computation based on market values.

Grasp the impact of taxation on the cost of capital and investment decisions.

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Definitions:

Trigeminal

refers to the fifth cranial nerve responsible for sensation in the face and motor functions such as biting and chewing.

Optic

Relating to the eye or vision; often used in terms associated with the visual pathways and structures.

Sympathetic Division

The sympathetic division is a part of the autonomic nervous system that prepares the body for physical activity, increasing heart rate, blood pressure, and energy availability.

Heart Contractions

The rhythmic contractions of the cardiac muscle of the heart that pump blood throughout the body.