The K-Percent Rule, an Example of a Money Targeting Rule

question 22

Multiple Choice

The k-percent rule, an example of a money targeting rule, relies on a relatively stable

• A) nominal GDP.
• B) supply of money.
• C) cash rate.
• D) real interest rate.
• E) demand for money.

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Definitions:

Dividend Expense

An incorrect term, as dividends are distributions of earnings to shareholders and not an expense. Instead, consider "dividend payment."

Cash Dividends

Payments made out of a corporation's earnings to its shareholders, usually in the form of cash.

Stock Investments

Investments made by purchasing shares of companies in the hope of earning dividends or selling the shares at a higher price.

Insignificant Influence

A situation where an investor does not have the power to participate in the financial and operating policy decisions of another entity.