If a Firm Sees Its EPS Increase 27% on a 12

question 13

Multiple Choice

If a firm sees its EPS increase 27% on a 12% increase in sales, what is the firm's DOL.During the same period the firm saw its EBIT increase only 8%.

• A)1.50
• B)3.38
• C)1.34
• D)0.67

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Definitions:

National Output

The total value of goods and services produced by a country's economy over a specific period of time. It's synonymous with gross domestic product (GDP).

Crowding-Out Debate

A discussion on how government borrowing or spending may lead to reduced investment in the private sector due to increased interest rates or other mechanisms.

Keynesians

Economists and theories following the principles of John Maynard Keynes, emphasizing the role of government intervention to moderate economic cycles.

Conservative Economists

Economists who generally favor policies that aim to promote free markets, low taxation, and minimal government intervention in the economy.