Richard's Sporting Goods Reports Net Income of $100,000,net Sales of $500,000,and

question 62

Multiple Choice

Richard's Sporting Goods reports net income of $100,000,net sales of $500,000,and average assets of $1,000,000.The profit margin is:

• A)10%.
• B)20%.
• C)50%.
• D)5 times.

---

Definitions:

Aggregate Expenditure Line

A relationship tracing, for a given price level, spending at each level of income, or real GDP; the total of C + I + G + (X - M) at each level of income, or real GDP.

Marginal Propensity

The ratio of the change in consumption to the change in income, indicating how much consumption will change with a change in income.

Real GDP

The measure of a country's economic output adjusted for price changes, providing a more accurate reflection of an economy's size and growth.

Inventory Adjustments

Changes made to the recorded amount of inventory to account for discrepancies, damages, losses, or theft.