In the RBC Model,supply Shocks

question 121

Multiple Choice

In the RBC model,supply shocks

• A)are always favorable by definition,but come at irregular intervals.
• B)are always adverse by definition,but come at irregular intervals.
• C)alternate between favorable and adverse shocks.
• D)follow demand shocks with the opposite effect on output.

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Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Pre-split Price

The stock price of a company before it undergoes a stock split, which increases the number of shares while reducing the price per share.

Post-split Price

The adjusted price of a stock after a company has completed a stock split.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, reflecting a company's desire to reinvest its profits.