Use the Following to Answer Questions

question 108

Multiple Choice

Use the following to answer questions:
-(Figure: Fiscal Policy with a Fixed Money Supply) Refer to Figure: Fiscal Policy with a Fixed Money Supply. Assume that this economy is at E₁. Now government deficit spending increases and the Federal Reserve expands the money supply. According to this model:

• A) real GDP might increase in the short run, but inflation can lead to a return to the original level of real GDP in the long run.
• B) real GDP will decrease because the government expanded deficit spending.
• C) real GDP will decrease, but not as much as if the Federal Reserve had contracted the money supply.
• D) interest rates will decrease.

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Definitions:

Quorum

The minimum number of members that must be present at a meeting to make the proceedings of that meeting valid.

Shareholder Meetings

Gatherings of a corporation's shareholders, held to discuss company affairs, make decisions, and vote on corporate governance matters.

Outstanding Shares

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including shares held by institutional investors and restricted shares owned by the company’s officers and insiders.

Cumulative Voting

A method of voting used in corporate elections that allows shareholders to allocate their total votes in any proportion among candidates.