Increases in Productivity Will

question 89

Multiple Choice

Increases in productivity will

• A) cause the price level to rise.
• B) impact short-run aggregate supply but not long-run aggregate supply.
• C) impact aggregate demand but not aggregate supply.
• D) increase long-run aggregate supply.
• E) increase the price level and aggregate supply.

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Definitions:

Residual Dividend Policy

A strategy where dividends paid to shareholders are based on earnings left after all operational and expansion financing needs are met.

Target Capital Structure

The mix of debt, preferred stock, and common equity that a company aims to hold to minimize its cost of capital.

Projected Capital Budget

A forward-looking budget that outlines anticipated investments in projects and assets for the purpose of long-term growth.

Net Income

The net income of a business following the deduction of all costs and taxes from its overall revenue.