Forward Guidance Is

question 13

Multiple Choice

Forward guidance is:

• A) statements today about policy targets in the future.
• B) expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target.
• C) asset purchases that shift the composition of the Fed's balance sheet.
• D) statements of policy changes and dates those changes will take effect.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of the corporation's profits.

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out to shareholders as dividends, typically used for reinvestment in the business, paying off debt, or other purposes.

Additional Paid-in Capital

The amount of money investors pay above the par value of stocks during an equity financing round; it represents excess capital collected from shareholders.