Measures of GDP May Understate the Economic Well-Being of People

question 48

Multiple Choice

Measures of GDP may understate the economic well-being of people in developing countries if those countries tend to

• A)import much more than they export.
• B)have a high degree of foreign direct investment.
• C)emphasize agricultural and resource-based production.
• D)have very high rates of pollution.
• E)have a large share of nonmarket activities.

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Definitions:

Return On Total Assets

A financial ratio that measures a company's ability to generate profit from its assets.

Return On Total Assets

A measure of a company's profitability relative to its total assets, indicating how effectively it uses its assets to generate earnings.

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company from the shareholders' perspective.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects cash from its credit sales by calculating the number of times average accounts receivable are collected during a period.