Figure 10-1 ​

question 65

Multiple Choice

Figure 10-1
​
-If the price level in Figure 10-1 were 110,

• A)inventories would be accumulating.
• B)firms would have to lower their prices.
• C)aggregate quantity demanded would equal aggregate quantity supplied.
• D)shortages of goods would exist.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Present Value Index

A financial metric that evaluates the profitability of an investment or project by comparing the present value of cash inflows to the present value of cash outflows.

Compound Interest

This concept involves calculating interest on the original investment or loan amount, in addition to the interest that has compounded from past periods.

Cash Payback Period

The duration required for an investment to generate cash flows sufficient to recover the initial outlay, measuring the investment's liquidity or risk.