Other things equal, if $100 billion of government purchases (G) is added to private spending (C + I g + X n ), GDP will:
A. increase by $100 billion.
B. increase by less than $100 billion.
C. increase by more than $100 billion.
D. fall by $100 billion.
C. increase by more than $100 billion.
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An important difference between offering prospectus in a public bond issue and the offering memorandum in a private placement is
A) all relevant factual information about the firm and its financing is required in the prospectus but not in the offering memorandum. B) evidence of due diligence is required in the offering memorandum but not in the prospectus. C) the prospectus may not contain any projections about the company's future while an offering memorandum has no such restriction. D) There are no differences between these two documents.
Price floors are designed to
A) establish a minimum allowable price. B) allow free market prices to be achieved. C) create shortages where none existed before. D) none of the above.