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Analyze the following statement,and show what would happen in the long run if such advice were followed by the Fed: "The increase in the stock market has increased people's wealth.As a result,their consumption has increased,increasing aggregate demand and output.So the Fed needs to increase the money supply,since with higher income,people's demand for real money balances will be higher."
Dividend
A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional stocks.
Depressed Stock Price
Refers to the condition of a stock's market price being significantly lower than its perceived value or historical averages, often due to external factors.
Capital Restructure
The process of changing a company's debt-to-equity ratio or its capital structure through methods like issuing new securities, repurchasing shares, or swapping debt for equity.
Stock Dividend
A form of dividend payment made by a corporation to its shareholders in the form of additional shares, rather than cash.
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