Which of the Following Events Will Cause the External-Balance Line

question 13

Multiple Choice

Which of the following events will cause the external-balance line in the phase diagram to shift to the left?

• A) an appreciation of the exchange rate
• B) a decline in the interest rate on foreign debt
• C) a decline in the absorption
• D) a decline in export earnings

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Definitions:

Dividend Policy

A company's strategy or policy in determining the size and frequency of dividend payments to shareholders.

Ex-Dividend Date

The date on which a stock begins trading without the entitlement to the declared dividend, typically set two business days before the record date.

Future Dividends

Future Dividends refer to dividend payments that a company is expected to issue to its shareholders in the future, based on its earnings and dividend policy.

Residual Dividend Policy

A residual dividend policy involves a company paying out dividends from the leftover net income after all operational and project financing needs are met.