All of the Following Statements Are True Except

question 30

Multiple Choice

All of the following statements are true except

• A)the Lucas wedge arises from the slowdown of productivity growth that began during the 1970s.
• B)real GDP per person was $45,000 per year lower in 2016 than it would have been with no growth slowdown.
• C)the Lucas wedge accumulated to $790,000 per person by 2016.
• D)the Lucas wedge equals real GDP minus potential GDP.
• E)the Lucas wedge is the dollar value of the accumulated gap between what real GDP per person would have been if the 1960s growth rate had persisted and what real GDP per person turned out to be.

---

Definitions:

Intrinsic Value

The actual value of a company or an asset based on underlying perception of its true value including all aspects of the business.

Put Option

The right to sell an asset at a specified exercise price on or before a specified expiration date.

At The Money

The option’s exercise price and the price of the underlying asset are equal.

Out Of The Money

Out of the money describes an option where exercise would result in a negative cash flow. Out-of-the-money options are therefore never exercised.