Only purely domestic firms that buy all of their inputs and sell all of their outputs in their home countries are unaffected by events in international financial markets.

A company begins with the following simple balance sheet: $10 million in real assets; $1 million cash; $5.5 million each in owners' equity and debt. It is considering among the following actions:

A. Use half of the cash from the balance sheet to purchase equipment B. Borrow an additional $1 million and purchase equipment C. Raise an additional $1 million in equity to purchase equipment D. Raise an additional $1 million in equity to pay off debt Which will decrease a company's leverage ratio? a) A & B b) C & D c) A, B & C d) B, C & D

Why was the gold standard suspended during World War I?

A) Transporting gold became unsafe and complicated. B) Normal commercial transactions between countries ceased. C) Countries implemented mercantilism by hoarding gold. D) The Bank of England could not maintain the pound's value.