How Do We Measure Economic Growth

question 36

Multiple Choice

How do we measure economic growth?

• A) Increases in the price level, as indicated by the GDP chain price index.
• B) Increases in nominal GDP.
• C) Increases in real GDP.
• D) Increases in the labor force.

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Definitions:

Cost of Equity

The return that investors require for investing in a company's equity, representing the compensation for taking on equity risk.

Capital Structure

The specific blend of equity and debt that a company employs to fund its general activities and expansion.

Market Risk Premium

Refers to the extra expected return that investors demand for choosing to invest in the stock market over risk-free securities.

Levered Firm

A company that employs debt in its capital structure.