Total Expenditure Equals Total Income

question 47

Multiple Choice

Total expenditure equals total income

• A) because firms pay out everything they receive as income to the factors of production.
• B) only if firms sell all the goods they produce in a given time period.
• C) if firms do not save for future investment.
• D) only if net taxes equals government expenditures on goods and services.
• E) if firms earn zero profit.

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Definitions:

Paid-in Capital

The amount of money that a company receives from issuing shares of stock, recorded in the shareholders' equity section of the balance sheet.

Scrip Dividend

A method of paying dividends in the form of additional shares instead of cash.

Earnings Per Share

A financial ratio that measures the portion of a company's profit allocated to each outstanding share of common stock.

Declaration Date

The specific day on which a company’s board of directors announces its intent to pay a dividend to shareholders.