Stanwick, Inc

question 15

Multiple Choice

Stanwick, Inc. wants to measure the relationship between profitability and the investment made by stockholders. To measure this Stanwick should use the:

• A) return on equity ratio.
• B) earnings per share.
• C) net profit margin percentage.
• D) operating margin percentage.

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Definitions:

Crowding-out Effect

A situation where increased government spending leads to a reduction in private sector investment due to higher interest rates.

Aggregate Demand

The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.

Aggregate Demand

The total demand for all goods and services in an economy at a given overall price level and at a given time.

Consumption

The use of goods and services by households.