What is the difference between retained earnings and dividends?
What will be an ideal response?
Retained earnings are profits kept by a firm to be used for financing future expansion. Dividends are profits paid to shareholders.
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If other factors are held constant, an increase in the price level
A) causes desired net export spending to rise. B) causes the real value of the money to increase. C) causes desired net export spending to fall. D) induces people to spend their money faster.
In addition to open market operations and the required reserve ratio, another tool of monetary policy available to the Fed is
A) fiscal policy. B) tax rates and the progressivity of the income-tax system. C) government spending and various transfer-payment programs. D) the difference between the discount rate and the federal funds rate.