Real GDP Can Grow Over Time Because of

question 10

Multiple Choice

Real GDP can grow over time because of

• A)an increase in the amount of labor used in the production process
• B)an increase in the capital stock
• C)efficiency improvements
• D)all of the above
• E)only A and B

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Definitions:

NPV

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project, calculated by summing the present values of incoming and outgoing cash flows.

Cost of Capital

The rate of return that a company must pay on its investments to satisfy its shareholders or debt-holders.

Cash Flows

All money transactions entering and leaving a firm, with a significant influence on its liquidity.

Interest Payments

The amount paid by a borrower to a lender as compensation for the use of borrowed money.