We Are Using Resources Efficiently If We Can Produce More

question 257

True/False

We are using resources efficiently if we can produce more of one good without producing less of some other good that we value more highly.

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing financial leverage.

Retention Ratio

This ratio indicates the percentage of a company's earnings not distributed as dividends but reinvested in the business.

Return On Equity

A financial ratio that measures the profitability of a corporation in relation to stockholders' equity.

Fixed Asset Capacity

The maximum output or production level that can be achieved using the existing fixed assets under normal circumstances.