If the Stock Market Booms,then

question 101

Multiple Choice

If the stock market booms,then

• A)aggregate demand increases,which the Fed could offset by increasing the money supply.
• B)aggregate supply increases,which the Fed could offset by increasing the money supply.
• C)aggregate demand increases,which the Fed could offset by decreasing the money supply.
• D)aggregate supply increases,which the Fed could offset by decreasing the money supply.

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Definitions:

Debt-Equity Ratio

The quotient of total liabilities and shareholders' equity, representing a company's leverage financially.

Dividend Growth Model

A method for valuing a stock by assuming constant dividend growth and using future dividends to forecast stock price.

SML Approach

A method used in finance to determine the expected return of an investment with respect to its risk, as represented by its beta.