FIGURE 23-5 -Refer to Figure 23-5.Suppose That an Increase in Autonomous Investment

question 62

Multiple Choice

FIGURE 23-5
-Refer to Figure 23-5.Suppose that an increase in autonomous investment caused the AD curve to shift to the right,as shown.If the simple multiplier in this model is 5,then what is the value of the multiplier?

• A)1.2
• B)1.5
• C)4.0
• D)5.0
• E)not enough information to know

Identify the types of authority agents can hold and the implications of each for contractual and legal relationships.

Recognize the fiduciary duties agents owe to principals and the consequences of breaches of these duties.

Describe the legal remedies available to parties within an agency relationship when contractual obligations are not met.

Examine the principles of liability, including tort and contract liability, within the context of agency relationships.

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Definitions:

Salvage Value

Salvage value refers to the expected value an asset will have when it's no longer useful, essentially its end-of-life resale value.

Internal Rate Of Return

The discount rate at which the net present value of an investment's cash flows equals zero, used in capital budgeting to estimate the profitability of potential investments.

Operating Costs

Expenses associated with the day-to-day operations of a business, excluding costs directly related to production, such as utilities, rent, and office supplies.

Profitability Index

A financial metric that measures the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.