Assuming That Other Things Remain the Same, If the Government

question 44

Multiple Choice

Assuming that other things remain the same, if the government increases transfer payments to households, which of the following will most likely happen?

• A)Investment will rise.
• B)The rate of interest will rise.
• C)Public saving will rise.
• D)The market for loanable funds will be unaffected.

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Definitions:

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales or revenue, calculated by dividing sales by the average total assets.

DuPont Formula

A method that breaks down the return on equity into three component parts—profit margin, asset turnover, and financial leverage—to analyze a company's financial performance.

Return on Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit from an investment by its cost.

Investment Centers

Divisions or departments within a company responsible for generating revenue and controlling costs.