Assume That X Corp

question 52

Multiple Choice

Assume that X Corp. controls Y Corp., X constantly purchases and sells Y's voting shares on the open market while always ensuring that it maintains a controlling interest over Y. Which of the following statements pertaining to X buying and selling activity is correct?

• A) X's activity has no effect on the non-controlling interest.
• B) As X sells shares of Y, the non-controlling interest increases.
• C) As X sells shares of Y, the non-controlling interest decreases.
• D) As X buys shares of Y, the non-controlling interest increases.

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Definitions:

Passive Approach

A Passive Approach refers to a strategy where minimal intervention or action is taken, often relating to investment or policy decisions.

Expansionary Gap

A situation in which the actual output in an economy exceeds the output it would produce at full employment, leading to inflationary pressures.

Potential Output

The maximum level of output an economy can achieve when utilizing its resources fully without causing inflation.

SRAS Curve

The Short-Run Aggregate Supply curve, which shows the relationship between the price levels in an economy and the quantity of goods and services that producers are willing to supply in the short term.