Since the End of World War II, the U

question 175

Multiple Choice

Since the end of World War II, the U.S. has almost always had rising prices and an upward trend in real GDP. To explain this

• A) it is only necessary that long-run aggregate supply shifts right over time.
• B) it is only necessary that aggregate demand shifts right over time.
• C) both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must shift farther.
• D) None of the above cases would produce rising prices and growing real GDP over time.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Price-Earnings Ratio

A financial measurement for equities determined by dividing the share's market price by its earnings per share.

Market Price

The immediate price point at which assets or services can be exchanged in the market.

Common Stock

A type of stock representing ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.