What Is the Level of Real GDP Called in the Long-Run

question 38

Multiple Choice

What is the level of real GDP called in the long-run?

• A)frictional GDP
• B)short-run GDP
• C)potential GDP
• D)low capacity GDP

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Definitions:

Crossover Rate

The point at which two or more investment projects have the same net present value or rate of return, used in capital budgeting to compare projects.

Mutually Exclusive

Refers to a situation where the selection of one alternative prevents the selection of any other alternative.

Required Rate

The minimum return an investor expects to achieve on an investment, taking into account its risk.

Average Accounting Rate of Return

A financial ratio indicating the expected return on an investment, calculated by dividing the average profit by the initial investment cost.