The Sacrifice Ratio Is a Measure of the

question 15

Multiple Choice

The sacrifice ratio is a measure of the

• A)number of people unemployed due to disinflation.
• B)loss of real GDP associated with inflation.
• C)the crowding out of investment due to increases in government purchases.
• D)unemployment associated with a recessionary gap.
• E)cumulative loss in real GDP due to a disinflation.

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Definitions:

Retained Earnings

The portion of net income that is retained by a corporation rather than distributed to its shareholders as dividends, often used for reinvestment.

Other Comprehensive Income

A component of shareholders' equity that reflects the changes in net assets of a company not recognized in the profit or loss for a period.

Cumulative Preferred Stock

A type of preferred stock where dividends not paid in full accumulate and must be paid out before any dividends can be distributed to common stockholders.