Refer to the Above Diagram

question 155

Multiple Choice

Refer to the above diagram.If net exports are X_n2, the GDP in the open economy will exceed GDP in the closed economy by:

• A)AB.
• B)AD.
• C)FG.
• D)BD.

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Definitions:

Flexibility Option

An investment option that provides the holder with the ability to respond to changes in the financial market or business environment.

Surrogate Beta

Surrogate beta is a method used in finance to estimate the beta of a project or investment by using the beta of a similar, publicly traded company or project as a proxy.

Pure Play Method

A valuation technique that involves comparing the firm of interest to another company that has a single line of business similar to the target company.

Real Option

The right, but not the obligation, to undertake certain business initiatives, such as deferring, abandoning, expanding, staging, or contracting a project at a future date.