The GDP Deflator Is the

question 50

Multiple Choice

The GDP deflator is the

• A)difference between real GDP and nominal GDP multiplied by 100.
• B)difference between nominal GDP and real GDP divided by 100.
• C)ratio of real GDP to nominal GDP multiplied by 100.
• D)ratio of nominal GDP to real GDP multiplied by 100.

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Definitions:

Multiple IRR Projects

Investment projects that, due to their cash flow structure, yield more than one internal rate of return, complicating the investment decision.

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity, by calculating the present value of expected future cash flows.

Discounted Payback

A capital budgeting method that calculates the amount of time needed to recoup an investment based on its discounted cash flows.

Profitability Index

A calculation used to assess the desirability of an investment, defined as present value of future cash flows divided by initial investment.