Deficits That Arise from Discretionary Fiscal Policy Lead To

question 88

Multiple Choice

Deficits that arise from discretionary fiscal policy lead to:

• A)increased private demand for money,which is offset by the sale of more government securities.
• B)decreased private demand for money,which is offset by the sale of more government securities and higher interest rates
• C)increases in the number of government securities sold to the public and higher interest rates.
• D)decreases in the number of government securities sold to the public and higher interest rates.
• E)increases in the public's demand for money and increases in the number of government securities sold to the public,leading to lower interest rates.

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Definitions:

Small Stock Dividends

Dividends paid by a company to its shareholders in the form of additional shares, typically representing less than 20-25% of the existing shares’ total value.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a certificate or instrument.

Stated Value

A value assigned to no-par-value stock by the board of directors of a company, often used as the basis for accounting transactions.

Book Value Per Share

A measure that represents the equity value of a company per outstanding share, calculated by dividing the company's net assets by the number of shares outstanding.