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When the BEA Calculates Real GDP Using the Average of Prices

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When the BEA calculates real GDP using the average of prices in the current year and the year preceding it,and this average changes from year to year,this is called calculating GDP using


Definitions:

Internal Growth Rate

The maximum rate at which a company can expand its operations using only internally generated revenues, without resorting to external financing.

Plowback Ratio

The proportion of earnings retained by a company after dividends are paid, usually to fund growth or pay down debt.

Debt-Equity Ratio

A measure used to evaluate a company's financial leverage, calculated by dividing its total liabilities by its shareholders' equity.

Financial Plan

A comprehensive evaluation of an individual's or organization's current and future financial state by using known variables to predict future cash flows, asset values, and withdrawal plans.

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