For a Very Long Time the Country of Tofu Has

question 100

Multiple Choice

For a very long time the country of Tofu has had an inflation rate of 8 percent. Suddenly its inflation rate drops to 3 percent. The drop in the inflation rate

• A)could be due to slower money supply growth.We would expect unemployment to be higher.
• B)could be due to slower money supply growth.We would expect unemployment to be lower.
• C)could be due to higher money supply growth.We would expect unemployment to be higher.
• D)could be due to higher money supply growth.We would expect unemployment to be lower.

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Definitions:

EBIT

Earnings before interest and taxes, a measure of a company's profitability that excludes expense and income from interest and taxes.

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income, based on its capital structure.

ROCE

Return on Capital Employed; a financial ratio that measures a company's profitability and the efficiency with which its capital is used.

Financing Charges

Interest and other costs associated with borrowing funds or purchasing goods and services on credit.