-Refer to the Above Diagram

question 132

Multiple Choice

-Refer to the above diagram. Other things equal, an interest rate decrease coupled with a rightward shift in curve A will:

• A) shift curve B upward.
• B) shift curve B downward.
• C) has no effect on curve B
• D) reduce GDP.

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Definitions:

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales by calculating the percentage of revenue that exceeds the costs of goods sold.

Debt-Equity Ratio

A ratio indicating a company's use of financial leverage, found by dividing liabilities by stockholders' equity.

Dividend Payout Ratio

The portion of earnings paid to shareholders in dividends, calculated as total dividends divided by net income.

External Financing Need

The additional funding required by a firm to finance its expansion or growth projects beyond what it can generate from internal operations.