When Considering a Number of Investment Projects, the Project That

question 43

True/False

When considering a number of investment projects, the project that has the shortest payback period does not necessarily have the highest net present value.

---

Definitions:

Natural Rate

The natural rate is often described as the rate of unemployment where the labor market is in equilibrium, including frictional and structural unemployment but no cyclical unemployment.

Expected Inflation

The projection of the rate at which prices of goods and services will rise over a specific period in the future.

Expected Inflation

The rate at which the general level of prices for goods and services is expected to rise.

Short-run Phillips Curve

A graphical representation that shows the inverse relationship between the rate of unemployment and the rate of inflation in an economy over the short term.