If, for an Imaginary Closed Economy, Investment Amounts to $10,000

question 43

True/False

If, for an imaginary closed economy, investment amounts to $10,000 and the government is running a $2,500 deficit, then private saving must amount to $12,500.

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Definitions:

Debt-To-Equity Ratio

A calculation to determine a firm's financial leverage by dividing the total amount of its liabilities by the equity of its shareholders.

Equity Multiplier

A financial ratio indicating the proportion of a company's assets that are financed by stockholders’ equity, showing the level of financial leverage.

Earnings Per Share

A company's net profit divided by the number of its outstanding shares, indicating the profitability per share.

Price-Earnings Ratio

A financial metric used to evaluate a company's share price relative to its earnings per share, helping investors assess the market value of a stock.