As the Economy Nears the End of an Expansion,which of the Following

question 194

Multiple Choice

As the economy nears the end of an expansion,which of the following do we typically see?

• A)rising firm profits
• B)rising levels of firm investment
• C)rising interest rates
• D)falling wages relative to output prices

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Definitions:

Accounting Rate of Return

This is a financial ratio used to estimate the profitability of an investment, calculated by dividing the average annual accounting profit by the initial investment cost.