In a Closed Economy, If Y, C, and T Remained

question 404

Multiple Choice

In a closed economy, if Y, C, and T remained the same, an increase in G would reduce

• A)private saving and public saving.
• B)private saving but not public saving.
• C)public saving but not private saving.
• D)neither private nor public saving.

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Definitions:

Semistrong Form

A level of market efficiency that assumes stock prices already reflect all publicly available information, rendering fundamental analysis ineffective at achieving superior returns.

Constant Growth Model

A model for valuing a stock by assuming it will pay dividends that grow at a constant rate indefinitely.

Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Expected Return

A synonym for Expected Rate of Return, signifying the profit or loss investors anticipate from an investment, commonly shown as a percentage.