The Set of Mechanisms and Institutions That Resolve the Questions

question 154

Multiple Choice

The set of mechanisms and institutions that resolve the questions of what, how, and for whom goods are produced is called the _____

• A) economic system.
• B) circular-flow model.
• C) business resolution device.
• D) automatic stabilizer mechanism.
• E) multiplier mechanism.

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Definitions:

Stock Split

A stock split is a corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, while the market capitalization remains unchanged.

Retained Earnings

The portion of net income not distributed to shareholders as dividends and instead reinvested in the business.

Stable Dividend Policy

A strategy where a company aims to distribute a consistently fixed dividend to shareholders, regardless of the year-to-year fluctuations in earnings.

Earnings Projections

Forecasts of a company's future earnings, often based on past performance, current trends, and industry analysis.