Return-On-Equity Indicates How Much Net Income a Firm Earned Per

question 31

True/False

Return-on-equity indicates how much net income a firm earned per share of common stock outstanding.

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Definitions:

Aggregate Output

A composite measure of all final goods and services produced in an economy during a given period; real GDP.

Aggregate Demand Curve

A curve that shows the relationship between the overall price level and the total demand for all goods and services in an economy.

Nominal Income

The total amount of money earned by an individual or entity before adjustments for inflation or deflation.

Leading Economic Indicators

Variables that predict, or lead to, a recession or recovery; examples include consumer confidence, stock market prices, business investment, and big-ticket purchases, such as automobiles and homes.