Any Item That People Can Use to Transfer Purchasing Power

question 45

Multiple Choice

Any item that people can use to transfer purchasing power from the present to the future is called

• A)a medium of exchange.
• B)a unit of account.
• C)a store of value.
• D)None of the above is correct.

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Definitions:

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or under-valued.

Earnings Per Share

The amount of earnings a company makes, divided by its outstanding common shares, which reveals the firm's level of profitability.

Return on Assets

A financial ratio indicating the profitability of a company relative to its total assets, measuring how effectively a company uses its assets to generate earnings.

Debt-Equity Ratio

The indicator that quantifies how much of a company's assets are financed through equity and how much through debt.