The Relationship Between Consumer Expenditures and Disposable Income Is The

question 21

Multiple Choice

The relationship between consumer expenditures and disposable income is the:

• A) savings function.
• B) tax rate function.
• C) disposable income function.
• D) consumption function.

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Definitions:

Clientele Effect

A theory suggesting that the types of investors attracted to a company depend on the company's dividend policy and related tax treatments.

Compromise Dividend Policy

A strategy that aims to balance between retaining earnings for reinvestment and paying dividends to shareholders.

Residual Dividend Approach

A policy for determining dividend payments whereby dividends are set as the earnings left over after funding the company's capital expenditure and working capital needs.

Trading Range

The spread between the high and low prices at which a security trades over a certain period of time.