If the Rate of Inflation Is 12 Percent Per Year

question 66

Multiple Choice

If the rate of inflation is 12 percent per year, the price level will double in about:

• A)4 years.
• B)6 years.
• C)10 years.
• D)12 years.

---

Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Gross Margin Percentage

A financial metric that represents the portion of sales revenue that exceeds the cost of goods sold, expressed as a percentage.

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in the form of dividends, calculated by dividing total dividends by net income.