Use the Table for the Question(s)below

question 50

Multiple Choice

Use the table for the question(s) below.
Consider the following realized annual returns:
-The geometric average annual return on Stock A from 2000 to 2009 is closest to:

• A)12.4%.
• B)16.7%.
• C)13.2%.
• D)17.8%.

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Definitions:

Full Employment GDP

The maximum level of production an economy can sustain while keeping unemployment at its natural or non-accelerating inflation rate of unemployment (NAIRU).

Multiplier

In economics, a factor by which a change in spending results in an amplified change in national income and output.

Inflationary Gap

The difference between the actual output of an economy and the output it would produce without inflation, indicating an overheated economy.

Recessionary Gap

A situation where the real GDP is lower than the potential GDP at full employment, indicating underutilized resources.