The Following Data Show Uruguay's GDP Using Purchasing Power Parity

question 316

Multiple Choice

The following data show Uruguay's GDP using purchasing power parity in billions of dollars. Year 2000 2001 2002 2003 2004 2005 2006 2007 2008
GDP($) 26.1 25.8 23.3 24.3 27.9 30.1 33.9 37.2 40.2
Using the data, we can conclude that

• A) Uruguay's economy reached a peak in 2000.
• B) GDP per person in Uruguay almost doubled between 2000 and 2008.
• C) potential GDP in Uruguay doubled between 2000 and 2008.
• D) Uruguay's economy was entered a recession in 2008.

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Definitions:

Earnings Rate

The return on an investment or the amount of profit made compared to the amount of money invested.

Internal Rate of Return

An investment’s projected rate of return, calculated by finding the discount rate that sets the net present value of all cash flows (both positive and negative) to zero.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows, given a specified rate of return, adjusting for the time value of money.

Annuity

An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.