If Real GDP Per Person Was Equal to $2,000 in 1900

question 76

Multiple Choice

If real GDP per person was equal to $2,000 in 1900 and grew at a 1 percent annual rate, what would be the value of real GDP per person 100 years later?

• A) $2,210
• B) $4,000
• C) $5,410
• D) $20,000

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Definitions:

Certainty Equivalent Approach

A method used to evaluate investment opportunities under conditions of uncertainty, adjusting future cash flows to present value as if they were certain.

Forecast Cash Flow

The estimation of the amount of money expected to be received and paid out over a future period.

Risk Adjusted Rate

A rate of return that has been modified to take into account the risk of the investment, offering a way to compare the attractiveness of various investments.

New Venture

A newly established business enterprise, particularly one that is entrepreneurial in nature, aiming to meet a marketplace need by developing a viable business model around a product, service, process, or platform.