"Since a Household Cannot Afford to Keep Adding Indefinitely to Its

question 75

Multiple Choice

"Since a household cannot afford to keep adding indefinitely to its debt,a country cannot afford to do so either." This statement is an example of:

• A)interpretation of association as causation.
• B)ceteris paribus ("everything else held constant") analysis.
• C)rational behavior.
• D)the fallacy of composition.
• E)marginal analysis.

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Definitions:

Earnings Per Common Share

A financial metric used to gauge the profitability of a company on a per-share basis, calculated as net income less dividends on preferred stock divided by the average number of common shares outstanding.

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Book Value Per Share

A financial metric that calculates the value of a company's equity divided by the number of outstanding shares.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed in cash.