Y = C + I + G + NX Is

question 81

Multiple Choice

Y = C + I + G + NX is an identity because

• A)each symbol identifies a macroeconomic variable.
• B)the right-hand and left-hand sides are equal when an equilibrium is reached.
• C)the equality holds due to the way the variables are defined.
• D)None of the above is correct.

---

Definitions:

Cash Dividends Paid

The total amount of cash distributed by a company to its shareholders as dividends during a specific period.

Retention Ratio

The share of net income that remains in the business instead of being paid out to shareholders in the form of dividends.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing its debt or equity.

Total Asset Turnover

A financial metric that evaluates how effectively a company can produce revenue from its assets by contrasting net sales with the average total assets.