When a Nonprice Change Affects Any of the Four Components

question 152

Multiple Choice

When a nonprice change affects any of the four components of GDP the:

• A) aggregate demand curve will shift left or right.
• B) economy will move up or down along the aggregate demand curve.
• C) aggregate demand curve will remain unaffected.
• D) aggregate supply with shift left or right.

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Definitions:

Stock Dividends

A distribution of a company's earnings to shareholders in the form of additional shares, rather than cash.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the company does not change.

Retained Earnings

Retained Earnings represent the cumulative amount of net income earned by a company that is reinvested in the business, not distributed to shareholders as dividends.

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in a given period and must be paid out before dividends to common stockholders.