Use the Information Below to Answer the Following Questions

question 168

Multiple Choice

Use the information below to answer the following questions.
Fact 27.5.1
The economy of Beverly Hills has a consumption function of C = 10 + 0.8Y, investment equal to 6, government expenditure equal to 10, exports equal to 10, and an import function of M = 0.1Y.
-Refer to Fact 27.5.1. What is consumption expenditure in equilibrium in this economy?

• A)298
• B)106
• C)38.8
• D)114
• E)none of the above

---

Definitions:

Net Present Value Method

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the present value of expected future cash flows.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

Rate of Return

This is a measure of the profitability of an investment, calculated as a percentage of the original investment.

Initial Investment

The amount of money used to start a project, purchase assets, or establish a business operation.