Figure 20-9 -In Figure 20-9,the C + I + G + (X

question 84

Multiple Choice

Figure 20-9
-In Figure 20-9,the C + I + G + (X − IM) ₁ line is flatter than the C + I + G + (X − IM) ₀ line because the

• A) (X − I
• M)₁ line indicates that net exports decline as GDP rises.
• B) (X − I
• M)₁ line indicates that net exports rise as GDP rises.
• C) multiplier is greater for the (X − I
• M)₁ line.
• D) (X − I
• M)₁ line indicates that tariffs,quotas,and other trade barriers are keeping net exports below their full potential.

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Definitions:

Required Rate of Return

The minimum return an investor expects to achieve by investing in a particular asset, taking into account the risk level of the investment.

Flotation Cost

Flotation Cost refers to the costs associated with issuing new securities, including underwriting fees, legal expenses, and registration fees.

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage.

Dividend Growth Rate

An annualized percentage rate of growth of a company's dividend payments to shareholders, indicating the company's commitment to increasing shareholder value over time.