For a Country to Double Its Per Capita Income Every

question 46

Multiple Choice

For a country to double its per capita income every twenty years, it would have to sustain an annual economic growth rate equal to

• A) 1.75 percent.
• B) 2 percent.
• C) 3.5 percent.
• D) 4 percent.

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Definitions:

Contract Rate

The agreed-upon interest rate in a lending agreement, bond, or other financial contracts.

Market Rate

The prevailing interest rate available in the market for securities of a similar risk and maturity, or the standard rate charged or paid for a specific service or commodity.

Face Amount

The nominal value or principal amount of a security stated by the issuer, due to be paid at maturity.

Straight-Line Method

A method of calculating depreciation of an asset, which spreads the cost of the asset evenly over its useful life.