A Once-And-For-All Increase in the Price of a Raw Material,such

question 126

Multiple Choice

A once-and-for-all increase in the price of a raw material,such as crude oil,will

• A)not be inflationary,because this is,simply,"high prices."
• B)have a short-run inflationary effect and reduces employment.
• C)have no effect on inflation because this is the price of a raw material,not a final good.
• D)both A and C are correct

---

Definitions:

ROE

Return on Equity; a financial ratio indicating the profitability of a company in relation to its equity capital.

EPS

Earnings Per Share; a metric that indicates the portion of a company's profit allocated to each outstanding share of common stock.

Financial Risk

The possibility of losing money on an investment or business venture, including the risk of losing some or all of the original investment.

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, amplifying both potential gains and losses.