In General,the Sacrifice Ratio Will Be Smaller,the

question 91

Multiple Choice

In general,the sacrifice ratio will be smaller,the

• A)shorter it takes to revise inflationary expectations downwards.
• B)shorter it takes to revise inflationary expectations upwards.
• C)longer it takes to revise inflationary expectations upwards.
• D)longer it takes to revise inflationary expectations downwards.
• E)sacrifice ratio will be the same always.

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Definitions:

Debt Ratio

Debt divided by total assets. A financial ratio measuring the degree to which the firm uses borrowed money.

Total Debt

The sum of all liabilities, both current and long-term, that a company owes to external parties.

Net Worth

The total assets minus total liabilities of an individual or company, indicating financial health and stability.

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company makes after paying for variable costs of production but before paying interest or tax.