The Idea That New Policies Change the Economic Rules and Affect

question 99

Multiple Choice

The idea that new policies change the economic rules and affect economic behavior,so that no one can safely assume that historical relationships between variables will hold when policies change,is known as

• A)Okun's Law.
• B)Say's Law.
• C)the equation of exchange.
• D)the Lucas critique.

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Definitions:

Common Dividends

Payments made to shareholders out of a corporation's earnings, reflecting the portion allocated to holders of common shares.

Liquidation

The process of converting assets into cash, often during the winding down of a business or the selling off of stock.

Preferred Stock

Preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shareholders typically receive dividends before common shareholders.

Cumulative Dividends

Dividends that are owed and accumulate if not paid in a given period, typically associated with preferred shares.