The Economics of Money, Banking and Financial Markets (11th Edition) (The Pearson Series in Economics)
The Economics of Money, Banking and Financial Markets (11th Edition) (The Pearson Series in Economics)
11th Edition
ISBN: 9780133836790
Author: Frederic S. Mishkin
Publisher: PEARSON
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Chapter 8, Problem 1Q
To determine

The most important and least important source of external funding for Country US; Country G; Country J; Country C.

Expert Solution & Answer
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Explanation of Solution

The most important source of external funding for Country US is non-bank loans. Whereas Country G, Country J, and Country C prefer bank loans for external funding.

The least important source of external funding for Country US, Country J, and Country Cis stocks and for Country G is bonds.

Bank loans are an important source of external financing for the other countries except for Country US and stocks are least important for other countries except for Country G.

Economics Concept Introduction

Introduction:External financing refers to the funds raised from the issue of bonds, stock, debentures, and loans, which are considered external sources. Interest or dividends are the cost of external financing.

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