Economists Use the Term Shocks to Mean

question 17

Multiple Choice

Economists use the term shocks to mean

• A)unexpected government actions that affect the economy.
• B)typically unpredictable forces that have major impacts on the economy.
• C)sudden rises in oil prices.
• D)the business cycle.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, reflecting the present value of all future cash flows minus initial investments.

Internal Rate

Often synonymous with "Internal Rate of Return," referring to the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Capital Expenditure

Capital deployed by a corporation to buy, improve, and upkeep tangible assets like land, factories, or machinery.

NPV

Net Present Value, a calculation used to determine the present value of a series of future cash flows minus the initial investment, utilized in capital budgeting to assess the profitability of an investment.