Use the Information Below to Answer the Following Question(s)

question 62

Multiple Choice

Use the information below to answer the following question(s) :
1() the rate of depreciation is 14% per year,
2() the population growth rate is 4% per year, and
3() the growth rate of technology is 5% per year.
-Refer to the information above. Which of the following equals the annual growth rate of "effective labour" in the steady state in this economy?

• A) 3%.
• B) 2%.
• C) 5%.
• D) 12%.
• E) 9%.

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Definitions:

Terms Of The Loan

The specific conditions agreed upon by the lender and borrower, defining the loan amount, interest rate, repayment schedule, and other obligations.

Future Value

A future date's asset or cash value that matches a predetermined sum's worth in the present.

Interest Rate

An interest rate is the percentage at which interest is paid by a borrower for the use of money they borrow from a lender or the return on investment that an investor receives from their invested capital.

Cash Flows

Refers to the streams of incoming and outgoing cash transactions resulting from a company's operational, investing, and financing activities.