Which of the Following Statements Is Correct

question 172

Multiple Choice

Which of the following statements is correct?

• A) The price support program hastened the exodus of resources from agriculture.
• B) The main beneficiaries of government price support assistance were the very low income farmers.
• C) If the demand for agricultural products is inelastic, a relatively small decrease in supply will increase gross farm incomes.
• D) There is a misallocation of resources in rural America because of absolute and relative increases in the size of the farm population.

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Definitions:

Internal Growth Rate

The maximum rate at which a company can expand its operations using only internally generated revenues, without resorting to external financing.

Plowback Ratio

The proportion of earnings retained by a company after dividends are paid, usually to fund growth or pay down debt.

Debt-Equity Ratio

A measure used to evaluate a company's financial leverage, calculated by dividing its total liabilities by its shareholders' equity.

Financial Plan

A comprehensive evaluation of an individual's or organization's current and future financial state by using known variables to predict future cash flows, asset values, and withdrawal plans.