Which of the Following Statements Is FALSE? in the Long

question 109

Multiple Choice

Which of the following statements is FALSE? In the long run, monetary policy:

• A)affects only the aggregate price level.
• B)does not affect aggregate output.
• C)is neutral.
• D)increases potential output.

---

Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing leverage or debt financing.

Leverage Ratios

Financial metrics that assess the level of debt in a company's capital structure relative to its equity or assets.

Dividend Policy

A company's approach to distributing profits back to its shareholders, whether through cash dividends, stock dividends, or share repurchase plans.

Sales Forecasts

Sales Forecasts predict the amount of product or service a company expects to sell over a specific period, aiding in planning and budgeting.