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If the Economy Is at Potential Output and the Fed

question 129

Multiple Choice

If the economy is at potential output and the Fed decreases the money supply, in the short run the price level will likely_____ and real GDP will likely_____ .


Definitions:

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of the company's total net income.

Current Dividends

Dividends that are declared and paid to shareholders out of a company's current earnings or accumulated profits.

Future Dividends

Expected payments made by a corporation to its shareholder members based on future earnings, typically projected by the company’s management or analysts.

Target Payout Ratio

A goal set by a company to distribute a certain percentage of earnings to its shareholders in the form of dividends.

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