Which of the Following Is TRUE Regarding Real GDP

question 122

Multiple Choice

Which of the following is TRUE regarding real GDP?
I. Real GDP is the value of the total production of the country's farms, factories, shops, and offices.
II. Real GDP rises whenever inflation occurs.
III. Real GDP does not measure all that is produced.

• A) I and II
• B) I and III
• C) II and III
• D) I, II and III

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Definitions:

Hurdle Rate

The minimum rate of return on an investment that is required by a manager or investor to proceed with the investment.

Income Taxes

Taxes imposed by the government on the income generated by businesses and individuals.

Net Present Value

A financial metric that calculates the present value of all cash flows (both incoming and outgoing) associated with an investment, adjusted for time and interest.

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, indicating the annual return that makes the net present value of all cash flows from a particular project equal to zero.