The Following Questions Refer to the Excerpt Below

question 16

Multiple Choice

The following questions refer to the excerpt below.
"Something new has come to confront American democracy… This is our proudest boast: 'The American citizen has more comforts and conveniences than kings had two hundred years ago.' It is a fact and this fact is the outward evidence of the new force which has crossed the path of American democracy. The increasing stream of automobiles and radios,buildings and bathrooms,furs and furniture,liners,hotels,bridges,vacuum cleaners…these are the signs… Consumptionism is bringing it about that the American citizen's first importance to his country is no longer that of citizen but that of consumer."
Samuel Strauss,"Things Are in the Saddle," Atlantic Monthly,1924
-Which of the following economic developments most directly contributed to the situation described in the passage?

• A) The success of Progressive reforms
• B) The decline of large corporations
• C) The development of new manufacturing techniques
• D) The expansion of the nation's resource base

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, reflecting the earnings the company has made and decided to distribute.

Constant Growth DDM

A dividend discount model that assumes dividends will continue to increase at a constant growth rate indefinitely, used to evaluate the price of a stock.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends and without voting rights.

Plowing Back

The reinvestment of earnings by a company back into its own operation or projects, also known as retained earnings.