Joe MPurchases a House for $370,000

question 36

Multiple Choice

Joe M.purchases a house for $370,000.He sells the home 7 years later for $600,000.What is his Internal Rate Of Return?(IRR) ?

• A)15.7%
• B)7)15%
• C)7)50%
• D)5)70%

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Definitions:

Potential Output

The economy’s maximum sustainable output, given the supply of resources, technology, and rules of the game; the output level when there are no surprises about the price level.

Natural Rate

The natural rate refers to the long-term unemployment rate that an economy experiences under normal conditions, unaffected by short-term cyclical fluctuations.

Full-Employment

A scenario where an economy utilizes all accessible labor resources in the most optimized manner.

Potential Output

Represents the highest level of real Gross Domestic Product (GDP) that can be sustained over the long term without increasing the rate of inflation.