Lower Equitoral and Upper Equitorial Are the Same Except Lower

question 39

Multiple Choice

Lower Equitoral and Upper Equitorial are the same except Lower Equitorial has a smaller capital stock.Both countries undertake policies that raise their saving rates to the same higher level.We'd expect that

• A)both countries would have permanent increases in their growth rates, but the increase would initially be larger in Lower Equitorial.
• B)both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Upper Equitorial.
• C)both countries would have temporary increases in their growth rates, but the increase would be larger in Lower Equitorial.
• D)both countries would have temporary increases in their growth rates, but the increase would be smaller in Lower Equitorial.

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Definitions:

Total Asset Turnover

Total asset turnover measures how efficiently a company uses its assets to generate sales, calculated as sales divided by average total assets.

Inventory Turnover

A ratio indicating how many times a company's inventory is sold and replaced over a period, used to assess efficiency in managing and selling products.

Dividend Yield

An economic indicator revealing the yearly dividend payment of a company as a proportion of its share price.

Gross Margin Ratio

A profitability metric that measures the difference between revenue and the cost of goods sold (COGS), expressed as a percentage of revenue.