Which of the Following Is Correct

question 344

Multiple Choice

Which of the following is correct?

• A)Over the business cycle consumption fluctuates more than investment.
• B)Economic fluctuations are easy to predict.
• C)During recessions sales and profits tend to fall.
• D)Because of government policy the U.S. has suffered no recessions in the last 25 years.

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Definitions:

Debt

Money that is owed or due to another individual or entity, often involving agreed repayment terms and interest.

Supernormal Dividend

Dividends that are higher than the level that can be sustained by the long-term growth rate of the company.

Common Stock

Equity ownership in a corporation, with voting rights and potentially variable dividends.

Sinking Fund Provisions

A requirement that a borrower regularly set aside funds to repay a debt before or at maturity, often used in conjunction with bonds.