Answer the Question. -Two Candidates for Governor of a State Differ in Their

question 166

Multiple Choice

Answer the question.
-Two candidates for governor of a state differ in their accounts of the state's economy during the incumbent's term. The incumbent claims that during his four-year term the economy has
Improved, citing a rise in the median household income from $33,000 to $34,500. The challenger
Claims that the economy has declined, citing that the buying power of families in the state has
Declined during the four years. Which of the following best explains how both candidates can be
Right?

• A)Only those in the middle income group saw their incomes rise, those with lower and higher incomes actually saw their incomes decline during the incumbent's term.
• B)Though the median household income increased, prices increased by a greater percent, meaning that in real terms the median income actually decreased.
• C)The incumbent is referring to the state economy, while the challenger is referring to the national economy.
• D)It is not possible for both candidates to be right; one of them is obviously lying.

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Definitions:

Return on Assets

A profitability ratio indicating the efficiency with which a company uses its assets to generate earnings, calculated as net income divided by total assets.

Long-term Asset Turnover

A financial ratio that measures how efficiently a company uses its long-term assets to generate sales revenue.

Property, Plant, and Equipment

Long-term tangible assets used in the operating activities of a business, such as buildings, machinery, and equipment.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.