Which of the Following Accurately Describes an Effect of Hurricane

question 226

Multiple Choice

Which of the following accurately describes an effect of Hurricane Harvey on GDP?

• A)GDP would decrease reflecting the costs of cleanup.
• B)GDP would increase reflecting the costs of cleanup.
• C)GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm.
• D)GDP would increase well-being.

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Definitions:

Capital-Budgeting

The process by which investors or managers evaluate and select long-term investments based on their potential to generate net revenues.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, typically represented by the yield on government bonds.

Risk-Free Rate

The theoretical return on an investment with zero risk, typically represented by the yield on government securities.

Expected Rate

The rate of return that an investor anticipates earning on an investment without taking into account inflation or other factors that could affect the actual yield.