Figure 7-2 -Refer to Figure 7-2. If the Real GDP Is $7,000

question 131

Multiple Choice

Figure 7-2
-Refer to Figure 7-2. If the real GDP is $7,000 billion and the implicit price deflator is 1.16, what is the value of nominal GDP?

• A) $6,034 billion
• B) $8,120 billion
• C) $9,120 billion
• D) cannot be determined from the information given

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Definitions:

M&M Proposition I

A theory stating that the value of a leveraged firm is the same as the value of an unleveraged firm provided there are no taxes, bankruptcy costs, and asymmetric information.

Debt-Ratio

is a financial metric that compares a company's total debt to its total assets, showing how much of the company's assets are financed by debt.

Capital Structure

Refers to how a firm finances its overall activities and growth through different sources of funds, such as debt and equity.