Deflation Was a Problem in Both the Great Depression and the Recession

question 92

True/False

Deflation was a problem in both the Great Depression and the recession of 1979-1982.

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Definitions:

Preemptive Rights

The right of existing shareholders to purchase additional shares of new stock before it is offered to the public, to maintain their proportionate ownership.

Shareholder Value

The value delivered to shareholders, through both dividends and share price appreciation, as a result of company operations and management decisions.

Dilution of Control

The reduction in ownership proportion or influence of existing shareholders in a company due to the issuance of additional shares to new investors.

Nominal Rate

The interest rate before adjustments for inflation, reflecting the rate of interest that a borrower pays a lender.