As an Example of the Simplifications That Make Economic Theorizing

question 28

Multiple Choice

As an example of the simplifications that make economic theorizing possible,the major economic "totals" are assumed to be constant in the study of

• A)government budget deficits.
• B)macroeconomics.
• C)economic aggregates.
• D)microeconomics.
• E)unemployment and inflation.

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Definitions:

Net Present Value

A calculation that compares the present value of cash inflows to the present value of cash outflows over a period of time to assess the profitability of an investment.

Stock Repurchase Program

A plan initiated by a company to buy back its own shares from the marketplace, reducing the number of outstanding shares.

Special Dividend

A one-time, non-recurring dividend paid by a company to its shareholders, usually reflecting exceptionally good earnings.

2-for-1 Stock Split

A corporate action where a company divides its existing stock into two, reducing the price of each share for investors while maintaining the overall value of their investment.