-Refer to Figure 9-6

question 89

Multiple Choice

-Refer to Figure 9-6.Starting from a balanced budget,the government runs a budget deficit of $200 billion.Investment spending will

• A) decrease by $100 billion
• B) decrease by $200 billion
• C) increase by $100 billion
• D) increase by $200 billion
• E) not be affected by government budget deficit

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Definitions:

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout.

Retained Earnings

Profits that are held back in a company to be reinvested in its operations or to pay down debt rather than being distributed to shareholders as dividends.

Treasury Stock

Stocks that the issuing entity initially distributed and then bought back, decreasing the number of shares available for trade on the open market.

Par Value

The face or nominal value of a bond, stock share, or coupon as specified on a certificate or instrument.