In the Long-Run,an Increase in the Budget Deficit and an Expansionary

question 64

Multiple Choice

In the long-run,an increase in the budget deficit and an expansionary monetary policy would:

• A)increase the price level only.
• B)increase both the price level and real income.
• C)increase real income only.
• D)none of the above.

---

Definitions:

Profitability Index

A calculation that determines the relative profitability of an investment, expressed as the ratio of the present value of future cash flows over the initial investment cost.

Internal Rate Of Return

In financial evaluation, it's a measure used to assess the profitability of forthcoming investments, identified by the yield rate that renders the net present value of the project's cash flows neutral.

Required Rate Of Return

The minimum annual percentage return an investor expects to achieve by investing in a particular asset.

Internal Rate Of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.