Assume an Economy That Is Producing Only One Product

question 23

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \\\hline 1 & 20 & \$ 4 \\\hline 2 & 25 & 4 \\\hline 3 & 30 & 6 \\\hline\end{array}$$ Assume an economy that is producing only one product. Output and price data for a three-year period are shown in the table. If year 2 is chosen as the base year, in years 1 and 3 the price index
Values are

• A) 4 and 6, respectively.
• B) 6 and 4, respectively.
• C) 120 and 100, respectively.
• D) 100 and 150, respectively.

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Definitions:

Inventory Turnover

A ratio indicating how many times a company's inventory is sold and replaced over a period, used to assess efficiency in managing and selling products.

Dividend Yield

An economic indicator revealing the yearly dividend payment of a company as a proportion of its share price.

Gross Margin Ratio

A profitability metric that measures the difference between revenue and the cost of goods sold (COGS), expressed as a percentage of revenue.

Return on Common Stockholders' Equity

A measure of the profitability that indicates how much profit a company generates with the money shareholders have invested.