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Slav-nsk [51]
3 years ago
8

In open economies, A. countries can save only by acquiring foreign wealth. B. investment always refers to the domestic stock mar

ket. C. unlike the case of a closed economy, saving and investment are not necessarily equal. D. saving and investment are necessarily equal contrary to the case of a closed economy. E. as in a closed economy, saving and investment are not necessarily equal.
Business
1 answer:
ohaa [14]3 years ago
8 0

Answer:

C. unlike the case of a closed economy, saving and investment are not necessarily equal

Explanation:

An open economy occurs when international businesses in addition to domestic ones engage in trading activities.

Exchanges that occur may be for management expertise, goods and services, or technology.

In contrast a closed economy is one where there is no buying or selling with international businesses.

In an open economy people can put their savings in investment outside of the country. So domestic investment is usually not equal to savings.

However in a closed economy. All the savings are invested locally, so investment is usually equal to savings

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Define the following terms: a. Cost of debt b. Cost of equity c. After-tax WACC d. Equity beta e. Asset beta f. Pure-play compar
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Answer: The answers are explained below.

Explanation:

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• Cost of equity: The cost of equity is the return a firm pays to its equity investors e.g shareholders in order to reward them for the risk taken by investing their capital. Companies need capital to operate and grow hence, individuals and organizations who provide funds to such companies are rewarded.

• After tax WACC: The Weighted Average Cost of Capital (WACC) is a firm's combined cost of capital including preferred shares, common shares, and debt after the deduction of tax.

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The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The
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