Consider an Economy Where Factor Supply Is 2

question 45

Multiple Choice

Consider an economy where factor supply is 2.5 million units, the factor utilization rate is 0.85 and a simple measure of productivity (GDP per factor employed) is $200. This economy's GDP is

• A)$2.125 million
• B)$425 million
• C)$200 million
• D)$500 million
• E)$525 million

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Definitions:

Cash Dividend

A payout from a company's profits, determined by the board of directors, given to a group of its stockholders as cash.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.

Board of Directors

A group of individuals elected to represent shareholders and govern the corporation's affairs, making key decisions on its behalf.

Prior Period Adjustment

A correction of errors in previously issued financial statements to reflect accurate past financial information.