Suppose a Country Is Producing $20 Million of Real GDP

question 330

Multiple Choice

Suppose a country is producing $20 million of real GDP. If the economy grows at 10 percent per year, approximately how many years will to take for real GDP to grow to $80 million?

• A) 14
• B) 7
• C) 4
• D) 30

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Definitions:

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or undervalued.

Market Price

The present rate at which a service or asset is being traded.

Net Income

The final amount of money a company makes after removing all operational costs, taxes, and additional expenses from the overall income.

Return On Common Stockholders' Equity

A financial ratio that measures the profitability of a company from the perspective of common stockholders, calculated by dividing net income available to common shareholders by average common stockholder's equity.