Stop-Go Policy That Shifts Between Expansionary Monetary Policy and Restrictive

question 51

Multiple Choice

Stop-go policy that shifts between expansionary monetary policy and restrictive monetary policy will most likely

• A)promote economic stability and attract investment.
• B)lead to price stability because the restrictive policies will offset the effects of expansionary policies.
• C)create an environment of uncertainty,which will result in economic instability.
• D)help promote economic stability because changes in monetary policy will quickly exert a predictable impact on the economy.

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Definitions:

Reinvesting

The action of using profits or dividends from investments to purchase additional shares or assets, aiming to increase future earnings.

Annual Dividend

The total amount of dividend payments made to shareholders over a one-year period.

Shares

Units of ownership interest in a corporation or financial asset, providing a portion of the profits to shareholders in the form of dividends.

Dividend Preference

A feature of certain types of shares that entitles holders to receive dividends before common shareholders are paid.