When Economists Make

question 6

Multiple Choice

When economists make

• A)positive statements,they are speaking not as scientists but as policy advisers.
• B)positive statements,they are speaking not as scientists but as forecasters.
• C)normative statements,they are speaking not as scientists but as policy advisers.
• D)normative statements,they are speaking not as policy advisers but as model-builders.

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Definitions:

Earnings Retention Ratio

The proportion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business, or to pay debt.

Dividend Payout Ratio

The percentage of net income a firm pays to its shareholders as dividends.

P/E Ratios

The Price-to-Earnings Ratio, a valuation metric comparing a company's current share price to its per-share earnings.

Inflation

The speed at which the overall price level of goods and services increases, diminishing the buying power.