If S Denotes the Saving Rate,I Denotes Aggregate Investment,and Y

question 226

Multiple Choice

If s denotes the saving rate,I denotes aggregate investment,and Y denotes GDP,then which of the following equations is correct?

• A) Y = s × I
• B) I = s × Y
• C) I = s/Y
• D) I = Y/s

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Definitions:

Preferred Stock

A type of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically with dividends that must be paid out before dividends to common stockholders.

Rate Of Return

A measure of the profit or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Constant Growth

A model assuming a company's dividends will continue to grow at a consistent rate indefinitely.

Dividend

A portion of a company's earnings that is paid to shareholders, usually on a regular basis.