A Company Had $9,000,000 in Net Income for the Year

question 53

Multiple Choice

A company had $9,000,000 in net income for the year. Its net sales were $13,200,000 for the same period. Calculate its profit margin.

• A) 17.5%.
• B) 28.0%.
• C) 62.5%.
• D) 160.0%.
• E) 68.2%

Comprehend the role and effect of automatic stabilizers in economic cycles.

Calculate the effects of changes in government spending and taxation using fiscal multipliers.

Identify fiscal policy measures for addressing budget deficits and national debt.

Evaluate the effectiveness and timing of fiscal stimulus packages.

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Definitions:

FUTA

The Federal Unemployment Tax Act (FUTA) is a United States federal law that imposes a payroll tax on employers to fund state workforce agencies and unemployment insurance.

Medicare Taxes

Taxes that fund Medicare, a federal health insurance program, deducted from the paychecks of employees and also paid by employers.

Wages

Wages refer to the monetary compensation paid by an employer to an employee in exchange for work performed.

Withholding Allowances

A number that employees claim on their W-4 form that reduces the amount of federal income tax withheld from their wages, based on their personal circumstances.