If the MPS Is Only Half as Large as the MPC

question 198

Multiple Choice

If the MPS is only half as large as the MPC, the multiplier:

• A)is 2.
• B)is 3.
• C)is 4.
• D)cannot be determined from the information given.

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Definitions:

Cash Dividends

A distribution of profits by a corporation to its shareholders in the form of cash.

Operating Activities

Transactions and other events related to the day-to-day function of a business, typically involving revenue and expense activities directly affecting cash flow.

Investments In Securities

Financial assets such as stocks, bonds, or mutual funds purchased with the intent of generating income or appreciating in value.

Operating Activities

Activities that relate to a company's primary business operations, such as selling goods or services, which are reflected in its cash flow statement.