Refer to Exhibit 4

question 34

Multiple Choice

Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts. Also, suppose that the consumer's income is €100. Suppose that the price of a pair of socks has falls from €5 to €2. The income effect is represented by the movement from point? ​ ​

• A) Y to point X.
• B) X to point Z.
• C) X to point Y.
• D) Z to point X.

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Definitions:

Dividend Policy

Guidelines a company follows to decide how much it will pay out to shareholders in dividends, determined by factors like current profitability and future investment plans.

Return on Investments

A performance measure used to evaluate the efficiency of an investment, comparing the return to the investment’s cost.

Share Repurchase

A program by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock and potentially increasing the value of remaining shares.

Excess Cash

This refers to the amount of money a company holds that is beyond what is required for its operational needs and potential investments.