Suppose a Firm Buys $3000 Worth of Inputs from Other

question 57

Multiple Choice

Suppose a firm buys $3000 worth of inputs from other firms,hires $2000 worth of labour services,and has sales revenue of $7500.The firm's resulting profit is $2500.If the GST (a value-added tax) rate is 5%,this firm will pay ________ in GST.

• A)$0
• B)$125
• C)$225
• D)$375
• E)$2500

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Definitions:

Compounded Semi-annually

Interest calculated twice a year, factoring in previously accrued interest for each calculation.

Strip Bond

An investment instrument entitling its owner to receive only the face value of a bond at maturity.

Nominal Rate

The stated interest rate of an investment or loan, not adjusted for compounding or inflation.

Population Growth

The increase in the number of individuals in a population, often measured as the rate at which the number of individuals increases over a specific period of time.