What Annual Rate of Return Is Earned on a $2,000

question 111

Multiple Choice

What annual rate of return is earned on a $2,000 investment made in year 3 when it grows to $3,000 by the end of year 6?

• A) 6.99 percent
• B) 14.47 percent
• C) 24.00 percent
• D) 50.00 percent

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Definitions:

World Price

The international market price of a good or service, influenced by global supply and demand.

Free Trade

An economic policy that allows goods and services to be bought and sold across international borders with little to no government tariffs, quotas, subsidies, or prohibitions to inhibit exchange.

Consumer Surplus

The contrast between the potential payment by consumers for a product or service and their real expenditure.

Autarky

An economic system or policy of self-sufficiency where a country does not engage in international trade.