If We Define the Saving Rate as

question 35

Multiple Choice

If we define the saving rate as
,output as
,and the depreciation rate as
,and if
,the economy is:

• A)contracting.
• B)growing.
• C)at the steady state.
• D)in its short-run equilibrium.
• E)none of the above

---

Definitions:

Annualized Return

Annualized Return indicates the geometric average amount of money earned by an investment each year over a given time period.

Intrinsic Value

The actual, fundamental value of an asset, based on underlying perceptions of its true value including aspects of both tangible and intangible factors.

Market Efficiency

The hypothesis that financial markets are "efficient" in reflecting information in the price of securities, making it impossible to consistently achieve higher returns without assuming higher risk.

Discount Rates

The interest rate used to determine the present value of future cash flows in discounted cash flow analysis, which helps to assess the attractiveness of an investment.