Karma Company Has Total Assets of $190,000 and Total Liabilities

question 174

Multiple Choice

Karma Company has total assets of $190,000 and total liabilities of $90,000.The company's debt-to-equity ratio is closest to:

• A) 0.32 to 1.
• B) .047 to 1.
• C) 0.53 to 1.
• D) 0.90 to 1.

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Definitions:

Aggregate Demand

The total demand for all goods and services in an economy at different price levels, including consumption, investment, government spending, and net exports.

Price Level

This refers to the average of current prices across the entire spectrum of goods and services produced in the economy.

Spending Multiplier

The ratio of a change in output (economic activity) to a change in spending, indicating the ripple effect of an initial expenditure through the economy.

Aggregate Demand Curve

A graphical representation of the total demand for goods and services in an economy at various price levels, holding all else constant.