The Software and Related Services Sector Has a Multiplier Effect

question 217

Multiple Choice

The software and related services sector has a multiplier effect on the Indian economy with every one- rupee input spent by the" information technology sector" producing an increase in real GDP by rupees.
HYPERLINK "http://www.ft.com/" www.ft.com, 2/28/20
According to the story, if _ _ in the software and related services sector increases by $15 billio GDP will increase by .

• A) consumption; $30 billion.
• B) consumption; $2 billion.
• C) investment; $30 billion.
• D) investment; $2 billion.

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Definitions:

Net Operating Income

The profit generated from a company's core business operations after deducting all operating expenses except for interest and taxes.

Degree Of Operating Leverage

A financial metric that measures the sensitivity of a company's operating income to its sales. Higher leverage indicates that a small change in sales can lead to a large change in operating income.

Contribution Format

A method of income statement presentation that separates variable costs from fixed costs, highlighting the contribution margin.

Sales Mix

The proportion of different products or services that comprise the total sales of a company, affecting overall profitability.