-In the Above Figure, If the Economy Is Initially at Point

question 222

Multiple Choice

-In the above figure, if the economy is initially at point a, the short-run effect of a cut in the federal funds rate is given by movement from point

• A) a to point b, increasing output and the unemployment rate.
• B) a to point b, increasing output and decreasing the unemployment rate.
• C) a to point d, decreasing output and increasing the unemployment rate.
• D) a to point c, keeping output and the unemployment rate constant.

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Definitions:

Retained Earnings

Profits that a company chooses not to distribute as dividends to shareholders but instead reinvests in the business or keeps as reserve.

Depreciation

A technique for distributing the expense of a physical asset across its lifespan.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Common Stock

Type of equity ownership in a corporation, entitling holders to vote at shareholder meetings and to receive dividends.