In the Short-Run,any Fall in EP /P,regardless of Its

question 38

Multiple Choice

In the short-run,any fall in EP /P,regardless of its causes,will cause

• A)an upward shift in the aggregate demand function and an expansion of output.
• B)an upward shift in the aggregate demand function and a reduction in output.
• C)a downward shift in the aggregate demand function and an expansion of output.
• D)an downward shift in the aggregate demand function and a reduction in output.
• E)an upward shift in the aggregate demand function but leaves output intact.

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Definitions:

Shares Outstanding

Shares outstanding refer to all shares currently owned by shareholders, including restricted shares owned by company insiders and share blocks held by institutional investors.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and gives holders voting rights and a share in the company's profits via dividends.

Paid-In Capital

Funds that shareholders contribute to a company in exchange for equity, beyond the par value of the shares.

Par Value

The face value of a stock or bond as stated by the issuing company, which does not necessarily reflect its market value.