If Real GDP Is $800 Million and Aggregate Labour Hours

question 8

Multiple Choice

If real GDP is $800 million and aggregate labour hours are 20 million, labour productivity is

• A)$40 an hour.
• B)$16,000 million.
• C)$40 million.
• D)$160 an hour.
• E)$16 an hour.

---

Definitions:

Accounting Rate

The interest rate used in the process of accounting, particularly in discounting cash flows, which can affect the calculation of net present value or internal rate of return.

Hurdle Rate

The minimum rate of return required by management for an investment to be acceptable, used in budgeting and capital allocation decisions.

Internal Rate

This term is too broad without specific context, such as “Internal Rate of Return (IRR).” Assuming IRR, it is a financial metric used to estimate the profitability of potential investments.

Present Value

The today's value of a forthcoming sum of money or cash flow sequence, determined by a specific rate of return.