To explain: The government groups which compete for funds in the U.S based capital market.
Introduction:
Capital Markets:
These are the type of financial markets in which buyers and sellers are involved in a trade of commercial securities like bonds, stocks, etc.
Answer to Problem 1DQ
In the U.S. based capital markets, the government groups which compete for funds are:
 1. The federal government
 2. The government agenciesÂ
 3. The state and local governments
Explanation of Solution
In the capital market of the United States the government groups which compete for funds are as follows.
The federal government
In this form of government, power is divided amongst the federal and state government. The collection of funds is imperative for the fulfilment of various purposes, such as education, public welfare, construction of roads, bridges, and highways.
The government agency
It is a government organization that is established by either legislation or by executive powers. It is a permanent or quasi-permanent agency whose main obligation is to handle and perform the specific administrative functions. It requires financial capital to cater to the promotions of various health and education-related programs, construction of roads, dams, highways, and public utilities like water, electricity, etc.
The state and local governments
The state government is an administrative body that makes and executes various laws and duties for a particular state. The local government handles and measures the performances within a particular geographical area. They need a budget for the welfare of the public, roads and highways constructions, and other public utilities like water, electricity.
All of the above-mentioned government groups compete with one another and other corporations for a limited supply of financial capital.Â
Want to see more full solutions like this?
Chapter 14 Solutions
Foundations of Financial Management
- 5. Agencies that facilitate international trade Which of the following is true about the Overseas Private Investment Corporation (OPIC)? OPIC does not provide services to exporters. OPIC insures direct U.S. investments in foreign countries against various types of risks. OPIC was formed in the later 1800's. Most OPIC loans are short-term.arrow_forwardIt is the obligation of compulsory taxes on individuals or corporations by governments. Taxes are imposed by most countries in the world, primarily to raise revenue for government expenditures, although they serve other purposes. a. Taxation b. Government Revenues c. Government Assessmentarrow_forward15arrow_forward
- Which of the following is not an exclusion from gross income? A. Income of government propertiesB. Income taxes collected by the BIRC. SSS benefitsD. Dividend income payable to a foreign governmentarrow_forward15. Beginning in the 1980s, Interstate Banking became an important issue for banks and the companies they do business with. Finally, in 1997 the United States allowed nationwide banking. Explain the implications of nationwide banking for the banks and for the multination corporations that borrow from the banks.arrow_forwardHow has money laundering affected internatioal trade? Answer should discuss this effect between developed and emerging economies. Use current article to support answer.arrow_forward
- Ef 99.arrow_forwardWhich of the following is not an underlying objective of the income tax laws? A. Income tax laws enable the government to regulate the health of the economy. B. Income tax laws are designed to converge with U.S. GAAP rules. C. Income tax laws enable the government to assist certain members of society who are viewed as deserving help. D. Income tax laws are designed to raise money for the operation of the federal government.arrow_forwardWhy is the personal income tax considered less stable than a consumption tax and how do U.S. corporate income taxes favor debt financing over equity financing for business expansion? In addition to this, what are the common criticisms of California’s Proposition 13?arrow_forward
- Why do we have banks chartered by the States, and some also chartered by the Federal government? What is the difference, if there is and which one is most preferred?arrow_forwardFrom the U.S. standpoint, a capital outflow will occur when a Japanese investor buys a portion of the U.S. government debt. True Falsearrow_forwardDistinguish between direct finance and indirect finance. Which of these is the most important source of funds for corporations in the United States?arrow_forward
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning- Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:Cengage
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningBusiness Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage