If profits are reinvested in the corporation, then
A. the company will sell more bonds in order to pay dividends to stockholders.
B. payments made to bondholders will be less.
C. the high profits indicate that common stockholders will get larger dividends than normal.
D. there are fewer funds available to distribute to stockholders.
Answer: D
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One of the features of money is its store of value. However, most people do not hold their wealth as currency. Given that currency is the most liquid type of asset, why don't people hold all their wealth as currency?
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower