Which of the Following Is Not True About Macroeconomic Models

question 1

Multiple Choice

Which of the following is not true about macroeconomic models?

• A)They are based on theories of macroeconomic behavior.
• B)They are mathematical summaries of the economy's performance.
• C)They attempt to identify key determinants of macro performance.
• D)They tend to agree with each other about how the economy works.

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Definitions:

Required Return

The minimum expected return an investor demands to compensate for the risk of an investment.

Plowback Ratio

The proportion of earnings retained by a company rather than distributed to its shareholders as dividends.

P/E Multiple

Also known as Price-to-Earnings Ratio, it compares a company's share price to its per-share earnings, used to evaluate if a stock is over or undervalued.

EPS

EPS stands for Earnings Per Share, a financial ratio that measures the amount of a company's profit that is allocated to each individual share of its common stock.