Use the Following Graph to Answer the Following Questions

question 19

Multiple Choice

Use the following graph to answer the following questions.The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased,with no change in short-run aggregate supply (SRAS) .

-Which of the following would have caused aggregate demand to decrease in the graph,such as occurred during the Great Recession?

• A) an increase in expected income
• B) a decrease in tax rates
• C) a decrease in housing prices and stock prices
• D) an increase in consumer sentiment
• E) an advancement in technology

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Definitions:

Information Content

The value of data provided to investors or decision-makers, particularly how much it can influence the assessment or future performance of an asset or company.

Signalling Hypothesis

The idea that actions by companies, such as dividend announcements or stock splits, send signals to investors about the firm's future prospects.

Dividend Policy

Dividend policy is a company's strategy or guidelines designed to decide the amount to be paid out to shareholders in the form of dividends.

Dividend Payment

The distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional stock.