-Refer to the Table Below

question 187

Multiple Choice

-Refer to the table below. If the transactions demand for money is $400 billion, an increase in the money supply from $800 billion to $900 billion would cause the equilibrium interest rate to:

• A) rise to 7 percent.
• B) rise to 6 percent.
• C) fall to 4 percent.
• D) remain at 5 percent.

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Definitions:

Return on Total Assets

A financial ratio that measures the efficiency of a company's use of its assets in generating profit, calculated as net income divided by total assets.

Price-earnings Ratio

A metric used in finance to compare a firm's present stock price with its earnings for each share.

Dividend Payout Ratio

A financial ratio that shows the percentage of a company's earnings paid out to shareholders as dividends.

Gross Margin Percentage

A profitability metric that measures how much of each dollar of revenue is left after deducting the costs of goods sold.