When Actual Unemployment Is Less Than Its Natural Rate,the

question 109

Multiple Choice

When actual unemployment is less than its natural rate,the

• A) economy is in a recession.
• B) economy is producing within its long-run capabilities.
• C) numbers must be wrong because the actual unemployment rate can never be less than the natural rate.
• D) economy is in an expansion.
• E) economy must be experiencing high inflation.

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Definitions:

Small Stock Dividend

A dividend paid in the form of additional shares, typically representing less than a 25% increase in outstanding shares.

Capital In Excess

Funds received by a company from issuing shares that exceed the par value of the shares.

Debt-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets, often used to assess the company's financial leverage.

Residual Dividend Policy

A strategy where dividends paid to shareholders are based on earnings left over after all operational and investment costs are covered.