6. Real GDP is gross GDP adjusted for:

a. population

b. inflation

c. output levels

d. depreciation

7. Cyclical unemployment exists because

a. certain skills tend to become obsolete as the economy continually changes.

b. there are periodic reductions in the economy s total demand for goods and services.

c. it takes some time for new entrants into the labor force to find employment.

d. domestic producers have lost out to foreign competition.

8.

Consider the following data regarding EPS, the PE ratio and stock price. Earnings per sharePrice earnings ratioStock price Corporation A $510 $50 Corporation B $1 200 $200 From the information above, we can conclude that...

a.

corporation A is less profitable than corporation B

b.

corporation A does not pay a dividend, but Corporation B does

c.

corporation B has less debt than corporation A

d.

corporation B may be perceived to have greater growth potential than Corporation A

9.

Data for last year for 3 divisions of a company are given below. Which division should be given preference if the company wanted to invest additional assets into one of the divisions? Division A: ROI 12% Division B: ROI 18% Division C: ROI 16%

a. Division A

b. Division B

c. Division C

d. Divide the additional assests equally among three divisions

10. Brite Inc. had the following assets and liabilities at the end of the year: -Assets $54,000 -Liabilities $32,000 What is the year-end stockholders' equity of Brite Inc.?

a. $22,000

b. $32,000

c. $86,000

d. Cannot be determined with this information