1-Companies issue stock in order to: increase the interest rate on loans. raise capital without borrowing....

1-Companies issue stock in order to:

increase the interest rate on loans.
raise capital without borrowing.
reduce the interest rate on investment.
turn a liquid asset into an illiquid asset.

2-In an open economy, investment can be greater than savings if there is a (net capital inflow - high tariff - net capital outflow)

Solutions

Expert Solution

1. Option B. raise capital without borrowing.

Explanation: Companies can raise capital either by borrowing or by issuing stocks.

2. net capital inflow

Explanation: Net capital inflow means the capital inflow is higher than outflow. So, investment is higher than savings.

Rahul Sunny answered 2 years ago

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