After 1987, the Fed

question 59

Multiple Choice

After 1987, the Fed

• A)stopped targeting M1 growth, but continued to target M2 growth.
• B)stopped targeting M2 growth, but continued to target M1 growth.
• C)stopped targeting either M1 or M2 growth.
• D)continued to target both M1 and M2 growth.

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Definitions:

Flotation Costs

The costs associated with the process of raising new capital through the sale of stocks or bonds to investors, including advisory, legal, and promotional expenses.

Preferred Stock

Preferred stock is a type of stock that confers certain privileges or priorities to its holders, such as fixed dividends and priority over common stock in asset liquidation.

Par Value

The face value of a bond or stock, as stated by the issuing company; it is often a nominal figure that does not necessarily equate to the market value.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.