Because Monetary and Fiscal Lags Are Long and Variable

question 97

Multiple Choice

Because monetary and fiscal lags are long and variable:

• A) stronger policies must be used.
• B) successful stabilization policy is completely impossible.
• C) attempts to stabilize the economy are often destabilizing.
• D) policy must be completely passive.

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Definitions:

Treasury Stock

Shares reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Appropriated Retained Earnings

Portion of retained earnings that a company reserves to be used for specific purposes or to meet future obligations.

Financial Statements

Financial statements are comprehensive reports created from a company's accounting records, presenting the financial performance and position at a specific point in time.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders and holds in its treasury.