The curve representing demand of the funds shifts to the left if economic growth in ___________?
Correct answer: C. domestic market is stagnant
- A. global market is stagnant
- B. global market is not stagnant
- C. domestic market is stagnant
- D. domestic market is not stagnant
Explanation
Stagnant domestic economic growth generally reduces profitable investment opportunities, shifting the demand for funds to the left. Stronger growth would normally increase borrowing demand rather than reduce it.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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