If the Price Level Increases by 2 Percent Each Year,the

question 69

True/False

If the price level increases by 2 percent each year,the inflation rate is increasing.

---

Definitions:

Debt-Equity Ratio

A measure of a company's financial leverage, calculated by dividing its total liabilities by shareholder equity.

Residual Dividend Policy

A strategy where companies pay dividends from the remaining earnings after all operational and growth expenses are covered.

After-Tax Earnings

Net income of a business after all taxes have been deducted, indicating the actual profit that remains for shareholders.

Retention Ratio

The proportion of net income that is retained in the company rather than distributed to shareholders as dividends, indicating how much money is reinvested in the business.