That only large, well-established corporations have access to securities markets
A) explains why indirect finance is such an important source of external funds for businesses.
B) can be explained by the problem of moral hazard.
C) can be explained by government regulations that prohibit small firms from acquiring funds in securities markets.
D) explains why newer and smaller corporations rely so heavily on the new issues market for funds.
A
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Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. If these two countries specialize and trade according to their comparative advantage
A. all individuals in both countries will benefit. B. Greece will specialize in and export cars. C. Germany will produce more cars than in the absence of trade. D. Germany will produce more fish than in the absence of trade.
Refer to Figure 6-6. As price falls from PA to PB, the quantity demanded increases most along D1; therefore
A) D1 is more elastic than D2 or D3 B) D1 is more inelastic than D2 or D3. C) D1 is elastic at PA but inelastic at PB. D) D1 is unit elastic.