Which of the Following Statements Is True

question 2

Multiple Choice

Which of the following statements is true?

• A)A change in sales should have more impact on current investment if it is expected to be permanent rather than temporary.
• B)On a percentage basis, investment is more volatile than consumption.
• C)In terms of dollars, investment and consumption are about equally volatile.
• D)all of the above
• E) none of the above

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's earnings.

Supernormal Growth

A period during which a company experiences significantly higher than average growth rates, often due to unique competitive advantages.

Short-Term

Pertaining to a time frame of typically less than a year, often used to describe loans, investments, and financial obligations.

Dividends

Financial rewards given by a company to its shareholders, predominantly coming from the company's profits.