Productivity Growth Is Important Because

question 82

Multiple Choice

Productivity growth is important because:

• A)it is the only way an economy can increase GDP.
• B)a small decrease in productivity growth causes a large decline in GDP.
• C)a large increase in productivity growth causes a small decrease in GDP.
• D)it causes an increase in the quantity of all resources available to an economy.
• E)it ultimately increases a nation's standard of living.

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its earnings before interest and taxes (EBIT) to its interest expenses.

Equity Multiplier

A financial ratio that measures a company's total assets financed by its shareholders' equity, used to evaluate financial leverage.

Net Profit Margin

A profitability ratio calculated as net income divided by revenue, indicating how much profit a company makes with its total sales.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.