Beautiful Boating Purchases Five New Boats at $200 Thousand Each

question 79

Multiple Choice

Beautiful Boating purchases five new boats at $200 thousand each to rent to vacationing fishermen.The firm sells its old boats to the public for $500 thousand.The net increase in GDP of these transactions was

• A)$500,000.
• B)$1,000,000.
• C)$1,250,000.
• D)$1,500,000.

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Definitions:

Swiss Francs

The official currency of Switzerland and Liechtenstein, known for its strength and stability as a global finance indicator.

Brazilian Real

The official currency of Brazil, represented by the symbol R$ and subdivided into 100 centavos.

Forward Rate

A term used in finance representing the interest rate applicable to a financial transaction that will occur in the future.

Interest Rate Parity

A theory stating that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.