Capital Constraints Can Occur Due to

question 58

Multiple Choice

Capital constraints can occur due to

• A) difficulties in accurately assessing the risks and returns associated with a firm's projects.
• B) the capital market's inability to fund all of a firm's projects due to a lack of funds.
• C) the capital market's policy of not funding all of a firm's projects.
• D) none of the above.

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Definitions:

Demand

In economics, demand is the quantity of a good or service that consumers are willing and able to purchase at various prices during a certain period of time.

Great Recession

A severe global economic downturn that began in 2007 and lasted until about 2009, marked by significant declines in the housing market, financial failures, and a surge in unemployment rates.

Fiscal Policy

A government's strategy for managing its budget through taxation and spending to influence the economy.

Tax Cuts

Reductions in the amount of taxes imposed by the government.