A Capital Gain Occurs When

question 5

Multiple Choice

A capital gain occurs when:

• A) the selling price is less than the purchase price.
• B) the purchase price is less than the selling price.
• C) there is no dividend paid.
• D) there is no income component of return.
• E) never, as they cannot exist.

---

Definitions:

Full Employment

The situation in an economy where all who are willing and able to work at prevailing wage rates are employed, with no involuntary unemployment.

Discretionary Fiscal Policy

Involves the use of government spending and tax policies to influence the economy, based on current economic conditions and objectives.

Natural Rate

The natural rate is a concept in economics describing conditions where the economy is at equilibrium, with full employment and no inflationary or deflationary pressures.

Aggregate Supply

The aggregate amount of products and services that companies in an economy are prepared and able to offer at a specific general price level during a certain time frame.