Studies in Industrially Advanced Nations Indicate That a 3 Percent

question 117

Multiple Choice

Studies in industrially advanced nations indicate that a 3 percent increase in incomes will generate a

• A) 1 percent increase in the amount of health care demanded.
• B) 1.5 percent increase in the amount of health care demanded.
• C) 3 percent increase in the amount of health care demanded.
• D) 6 percent increase in the amount of health care demanded.

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Definitions:

Investment Opportunities

Potential placements of capital in projects or assets that are expected to yield returns or financial growth over time.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to present value future cash flows, or in other cases, the central bank's interest rate for banks.

Net Present Value

The contrast between the present-valued cash inflows and outflows over a determined period.

Working Capital

The gap between a business's current assets versus its current liabilities, reflecting its short-term solvency and efficiency in operations.