Which of the Following Statements Is True

question 100

Multiple Choice

Which of the following statements is true?

• A) Higher interest rates typically encourage more savings.
• B) The savings of households are independent of tax rates.
• C) Households that expect an increase in future earnings are likely to save more.
• D) An increase in the consumption of households increases the savings of the households.

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Definitions:

Stock Price

The expense involved in buying a company's stock in the financial market.

Return on Assets

A financial ratio indicating the profitability of a company relative to its total assets, measuring how effectively those assets are being used to generate earnings.

Earning Per Share

A financial metric that represents a portion of a company's profit allocated to each outstanding share of common stock, showing a company's profitability per share.

Total Equity

The sum of shareholders' equity in a company, representing the total value of the company's assets that would remain after settling all of its debts.