A Company Provided the Following Information: There Was No

question 132

Multiple Choice

A company provided the following information: There was no change in contributed capital this year and there were no dividends declared in the current year. The return on equity ratio for the current year is:

• A) 20.7%
• B) 75%
• C) 3.8%
• D) 1.33%

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Definitions:

Disposable Income

Disposable income refers to the amount of money that individuals or households have available for spending and saving after income taxes have been accounted for.

Autonomous Consumption

The level of consumption that occurs when income is zero, reflecting the expenditure necessary to meet basic needs.

Saving Function

Is an economic concept describing the relationship between saving and income, indicating how changes in income levels affect the amount of money individuals save.

Consumption Function

A macroeconomic expression that defines the relationship between total consumer expenditures and gross national income, indicating how income affects spending patterns.