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There Has Been a Decrease in Investment

question 241

Multiple Choice

There has been a decrease in investment.As a result,real GDP will ________ in the short run,and ________ in the long run.


Definitions:

Accounting Rate of Return

A financial metric used to assess the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Cost of Capital

The return rate that a company must earn on its investment projects to maintain its market value and attract funds.

Net Present Value

A calculation used to determine the present value of a series of future cash flows minus the initial investment, often used in capital budgeting.

Return on Investment

A financial metric used to evaluate the efficiency of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

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