Monetary Policy

question 187

Multiple Choice

Monetary policy

• A)must be described in terms of interest-rate targets.
• B)must be described in terms of money-supply targets.
• C)can be described either in terms of the money supply or in terms of the interest rate.
• D)cannot be accurately described in terms of the interest rate or in terms of the money supply.

---

Definitions:

Value of a Firm

An assessment of the total worth of a business, considering all sources of equity and debt.

Debt Financing

The method of raising capital through the sale of bonds, bills, or notes to individuals or institutions.

Interest Tax Shield

The reduction in income taxes that results from taking the interest expense as a deductible charge.

Capital Structure

The capital structure is the mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity which funds its overall operations and growth.