Final answer:
Businesses must balance their immediate financial status and future profit expectations when considering hiring needs, alongside choosing methods of financial capital acquisition such as investments, loans, and stock. Confidence in future repayment ability impacts the demand for financial capital.
Step-by-step explanation:
When determining its hiring needs, a business must first consider its financial status and its human resource needs. A firm's financial considerations include assessing its ability to invest in projects that may not pay off for many years, such as building a new factory or investing in a research and development project. This requires a careful balance between current expenditures and the expectation of future profits. Additionally, firms must decide how to acquire the necessary financial capital, which can be done through early-stage investors, reinvesting profits, borrowing, or selling stock. Each method has different implications for repayment and ownership.
On an individual level, such as with college students, the need for funds to cover current expenses may lead to borrowing, with the expectation to repay these loans once stable employment is obtained. When businesses and consumers are confident in their future ability to repay, it influences the demand for financial capital.