Use the Following to Answer Questions

question 131

Multiple Choice

Use the following to answer questions .
Exhibit: Long-run Equilibrium
-(Exhibit: Long-run Equilibrium) The potential output in this economy is

• A) $6,000 billion at a price level of 1.08.
• B) $7,000 billion at a price level of 1.12.
• C) $7, 100 billion at a price level of 1.16.
• D) $7,056 billion at a price level of 1.08.

---

Definitions:

Debt-To-Equity Ratio

An evaluation measuring how shareholder equity contrasts with debt in the economic arrangement to finance a company's assets.

Equity Multiplier

A ratio of financial leverage which quantifies the fraction of a company's assets funded by the equity of its shareholders.

Net Profit Margin

A financial ratio that shows the percentage of net income to revenue, indicating the efficiency at which a company converts sales into net profit.

Gross Margin

The difference between the sales revenue and the cost of goods sold, indicating the profitability of a company's core business activities.