The Following Table Illustrates the Multiplier Process in a Private

question 162

Multiple Choice

The following table illustrates the multiplier process in a private closed economy: Refer to the above table.The change in income in round two will be:

• A)$4
• B)$16
• C)$20
• D)$24

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Definitions:

Internal Rate of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows zero.

Required Return

The minimum return an investor expects to achieve on an investment, considering the investment's risk level.

NPV

or Net Present Value, is a financial metric used to evaluate the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows.

Net Present Value

Calculating the variance between the present-day value of cash flows in and out over an established timeframe.