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In a small European country,it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million.What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $12 million,assuming no technological change and no change in the hours of work?
Annual Interest
The total amount of interest payable on a loan, bond, or other financial instrument over the course of a year.
Market Rate
The current interest rate offered in the market for instruments with similar risk and maturity levels.
Present Value Factor
A financial calculation used to determine the present value of a sum of money to be received in the future by accounting for time value of money.
Issue Price
The price at which new shares are offered to the public by a corporation during an issuance.
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