What happens in the primary market?
A) primary inputs like electricity are sold
B) a corporate financial manager will resell previously issued shares of stock
C) newly issued claims are sold by the borrowing firm to the initial buyer
D) already issued claims are sold from one investor to another
Answer: C
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Real business cycle theorists think that most business cycle fluctuations are caused by shocks to
A) the production function. B) the size of the labor force. C) the real quantity of government purchases. D) the spending and saving decisions of consumers.
Which of the following does not reduce the potential burden of an increase in debt on future generations?
a. the growth rate of output is high b. in response to increased debt, parents save more to leave their children larger bequests c. budget deficits raise interest rates d. All of the above are correct.