Use the Following to Answer Questions

question 41

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Expenditures Curve
Figure 13-6
-(Exhibit: Aggregate Expenditures Curve) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases. Further, I_P and G are autonomous. What is the marginal propensity to consume?

• A) 0.25
• B) 0.5
• C) 1.0
• D) 2

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Definitions:

Preemptive Right

Gives the current shareholders the right to purchase any new shares issued in proportion to their current holdings. The preemptive right enables current owners to maintain their proportionate share of ownership and control of the business.

Proxy Fight

An attempt to take over a company in which an outside group solicits existing shareholders’ proxies, which are authorizations to vote shares in a shareholders’ meeting, in an effort to overthrow management and take control of the business.

Dissident Shareholders

Shareholders who disagree with the company's management and policies, often expressing their dissatisfaction through votes against management proposals.

Semistrong-Form Market Efficiency

A form of market efficiency that posits all public information is already reflected in stock prices, alongside historical data.