A Disadvantage of Having an Annually Balanced Budget Is That

question 136

Multiple Choice

A disadvantage of having an annually balanced budget is that government spending would have to

• A)increase in recessions and decrease during expansions
• B)decline during a recession to offset the increase in tax revenues
• C)rise during a recession to match the increase in tax revenues
• D)rise during an expansion to offset the decline in tax revenues
• E)decline in a recession to match the decrease in tax revenues

Recognize the types of investors who prefer high dividend-payout stocks.

Comprehend the reasons behind investor aversion to dividend payments.

Identify the relationship between a firm's growth and its dividend payout ratio.

Understand the impact of tax rates on dividend policy theories.

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