Use the Table for the Question(s)below

question 100

Multiple Choice

Use the table for the question(s) below.
Consider the following realized annual returns:

-The average annual return on IBM from 1996 to 2005 is closest to:

• A)18.2%
• B)16.40%
• C)18.7%
• D)29.9%

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Definitions:

Crowding-out Effect

A situation where increased government spending leads to a reduction in private sector investment.

Multiplier Effect

An economic phenomenon where an increase in spending produces an increase in national income and consumption greater than the initial amount spent.

Aggregate Demand

The aggregate market demand for goods and services in an economic environment, valued at a specific price level within a certain timeframe.

MPC

Marginal Propensity to Consume, which is the proportion of any additional income that a consumer spends on goods and services.