During the Mid-1980s,we Observed a Significant Reduction in Oil Prices

question 16

Multiple Choice

During the mid-1980s,we observed a significant reduction in oil prices.In the United States,we would expect that this reduction in oil prices would cause

• A)a larger reduction in the CPI compared to the GDP deflator.
• B)an equal reduction in the CPI and GDP deflator.
• C)a larger reduction in the GDP deflator compared to the CPI.
• D)no change in the CPI and a reduction in the GDP deflator.

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Definitions:

ROE

Return on Equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Total Assets

The sum of all current and non-current assets owned by a company, indicated on the balance sheet, representing the total resources available to a company.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that are financed by shareholder equity.

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets, measuring how efficiently those assets are used to generate profit.