Suppose Each Good Costs $5 Per Unit and Megan Holds

question 246

Multiple Choice

Suppose each good costs $5 per unit and Megan holds $40. What is the real value of the money she holds?

• A)$40. If the price of goods rises, to maintain the real value of her money holdings she need to hold more dollars.
• B)8 units of goods. If the price of goods rises, to maintain the real value of her money holdings she needs to hold more dollars.
• C)$40. If the price of goods rises, to maintain the real value of her money holdings she need to hold fewer dollars.
• D)8 units of goods. If the price of goods rises, to maintain the real value of her money holdings she needs to hold fewer dollars.

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Definitions:

Shares Outstanding

The total number of shares of stock that are held by all shareholders, including share blocks held by institutional investors and restricted shares.

Dividend Income

Income received from owning shares in a company, paid out from the company's earnings to its shareholders.

Dividend Payable

The amount of money a company is committed to paying its shareholders in dividends for owning the company's stock.