A Period of Falling Prices Is Called

question 55

Multiple Choice

A period of falling prices is called:

• A) deflation.
• B) inflation.
• C) a depression.
• D) a recession.

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained for re-investment in the business or to pay debt, rather than being paid out as dividends to shareholders.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the market.

Issue Price Over Par

Occurs when a security, typically a bond, is sold at a price higher than its face value.

Preferred Stock

A class of shares which typically provides a fixed dividend and has priority over common stock in the distribution of assets during liquidation.