Examlex
Let x be the marginal propensity to consume, MPC. The principle of spending multiplier involves calculating the infinite sum 1 + x + x2 + x3+… Show that this sum is equal to 1/(1 - x).
Present Value Factors
Multipliers used to calculate the present value of a future sum of money or stream of cash flows given a specific interest rate.
Compound Interest
Interest computed on the original amount of a deposit or loan, incorporating all previously accrued interest from past periods.
Desired Rate
Typically refers to the target interest rate set by individuals or businesses for financial returns or lending activities.
Average Rate of Return
An investment's return, expressed as a percentage, which is calculated by dividing the average annual profit by the initial investment cost.
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