In Long-Run Equilibrium After a Permanent Money-Supply Increase There Follows

question 51

Multiple Choice

In long-run equilibrium after a permanent money-supply increase there follows:

• A) an increase in exchange rate, E.
• B) a decrease in exchange rate, E.
• C) an increase in output, Y.
• D) a decrease in output, Y.
• E) an unchanged exchange rate, E.

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Definitions:

Liquidating Dividend

A type of dividend paid by a company that is returning a portion of the capital to its shareholders, typically during dissolution.

Price/earnings Ratio

The Price/Earnings Ratio (P/E Ratio) is a valuation metric that compares the current share price of a company to its per-share earnings, used by investors to evaluate the investment attractiveness of a company.

Excess Cash

Refers to the amount of cash a company holds that is beyond what it requires for day-to-day operations and investments.

Dividend

The distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.