Use the Following Table for a Hypothetical Single-Product Economy Refer to the Data

question 158

Multiple Choice

Use the following table for a hypothetical single-product economy. $\begin{array}{c}\begin{array}{c}\\\underline{\text { Year }} \\ 1 \\2 \\3 \\4\end{array}\begin{array}{c}\text {Units of}\\\underline{\text { Output}}\\10\\12\\15\\20\end{array}\begin{array}{c}\text { Price of Bagel}\\\underline{\text { Per Unit}}\\\$ 10\\20\\ 30\\ 40\end{array}\begin{array}{c}\text {Price Index}\\\underline{\text {( Year 1=100) }}\\100\\200\\300\\400\end{array}\end{array}$
Refer to the data.Real GDP in year 3 is:

• A) $100.
• B) $450.
• C) $225.
• D) $150.

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Definitions:

Present Value

The present value of a future amount of money or series of cash flows at a given rate of return.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender.

Risk Averse

A descriptor for individuals or entities that prefer to minimize exposure to risk and avoid uncertain outcomes.

Risk and Return

The principle that potential return on investment rises with an increase in risk. Higher risk is associated with the greater probability of higher return and vice versa.