According to the Monetarists and New Classical Economists

question 33

Multiple Choice

According to the monetarists and new classical economists,

• A)only anticipated monetary policy actions will affect output and employment in the short run.
• B)only unforeseen monetary policy actions will affect output and employment in the short run.
• C)both anticipated and unanticipated monetary policy actions will affect output and employment in the short run.
• D)both anticipated and unanticipated monetary policy actions will affect output but not employment in the short run.
• E)none of the above.

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Definitions:

Market Risk Premium

The additional return an investor expects from holding a risky market portfolio instead of risk-free assets.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements, often based on the risk of investing in that company's equity.

Dividend Growth Model

A valuation method that estimates the price of a company's stock based on the dividend growth rate and the expected dividend payments.

Estimated Dividend Growth Rate

The projected annual rate at which dividends paid by a company or fund are expected to grow.