Examination of Recent Data for Many Countries Shows That Countries

question 86

Multiple Choice

Examination of recent data for many countries shows that countries with high saving rates generally have high levels of output per person because:

• A) high saving rates mean permanently higher growth rates of output.
• B) high saving rates lead to high levels of capital per worker.
• C) countries with high levels of output per worker can afford to save a lot.
• D) countries with large amounts of natural resources have both high output levels and high saving rates.

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Definitions:

Present Value Factor

A factor used in calculating the present value of a cash flow that will be received or paid at a future date.

Desired Rate

An expected or targeted rate of return or interest rate that an individual or company aims to achieve on investments or projects.

Average Rate of Return

A profitability gauge for investments, determined by dividing the initial investment cost into the average yearly profit.

Present Value Factor

A factor used to calculate the present value of a cash flow to be received in the future.