To Try to Eliminate a Recessionary Gap the Fed Typically__________

question 55

Multiple Choice

To try to eliminate a recessionary gap the Fed typically__________ the money supply,and to try to eliminate an inflationary gap the Fed typically __________ the money supply.

• A) increases; decreases
• B) increases; increases
• C) decreases; increases
• D) decreases; decreases

---

Definitions:

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of the company's total net income.

Negative Growth Rates

A decrease over time in the measurable value of an economic indicator, such as GDP or investment value.

Expected Capital Gains Yield

The anticipated rate of return from an investment due to an increase in its market price, not including dividends or other income.

Dividend Yield

Defined as either the end-of-period dividend divided by the beginning-of-period price, or the ratio of the current dividend to the current price. Valuation formulas use the former definition.