FIGURE 23-3 Refer to Figure 23-3

question 60

Multiple Choice

FIGURE 23-3 Refer to Figure 23-3.Which of the following statements correctly describes the difference between the multipliers (in response to an increase in autonomous expenditure) in Economy A and Economy B? The multiplier in Economy A is ________ while the multiplier in Economy B is ________.

• A)very small; equal to one
• B)very small; equal to the simple multiplier
• C)equal to the simple multiplier; almost zero
• D)equal to one; almost zero
• E)equal to one; equal to the simple multiplier

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Definitions:

Stock Repurchase

A corporate action in which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuing entity, which may not reflect market value.

Market Value

The existing rate at which an asset or service is offered for buying or selling in an unrestricted market.