The participants of financial system reduce the demand for their funds if the economic growth in _____________?
Correct answer: A. domestic market is stagnant
- A. domestic market is stagnant
- B. domestic market is not stagnant
- C. global market is stagnant
- D. global market is not stagnant
Explanation
Stagnant domestic growth creates fewer investment opportunities, so firms and other participants have less reason to borrow funds. Consequently, demand for funds falls in a stagnant domestic market.
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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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