The MPC Indicates the Portion of

question 94

Multiple Choice

The MPC indicates the portion of

• A)An additional dollar of disposable income that will be saved.
• B)An additional dollar of disposable income that will be spent.
• C)Total income that will be saved.
• D)Total income that will be spent.

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Definitions:

Plowback Ratio

The proportion of earnings that a company reinvests into its business rather than distributing to shareholders as dividends, indicating its growth strategy.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.

Plowback Ratio

The proportion of earnings retained by a company after dividends have been paid, often reinvested in the business for growth.

P/E Ratio

The P/E Ratio (Price-to-Earnings Ratio) is a metric used to value a company by dividing its current share price by its earnings per share, indicating how much investors are willing to pay for each dollar of earnings.