Beatrice Invests $1,000 in an Account That Pays 4% Simple

question 115

Multiple Choice

Beatrice invests $1,000 in an account that pays 4% simple interest. How much more could she have earned over a five-year period if the interest had compounded annually?

• A) $15.45
• B) $15.97
• C) $16.65
• D) $17.09
• E) $21.67

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Definitions:

Aggregate Demand

The total demand for all goods and services in an economy at various price levels, during a specific time period.

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, essentially meaning there is no involuntary unemployment.

Keynes

Refers to John Maynard Keynes, an influential British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.

Government Spending

Expenditures by the government for goods and services that directly benefit the population, including spending on health, education, defense, and public infrastructure.