An Increase in Capital Will Increase Real GNP Per Person

question 28

Multiple Choice

An increase in capital will increase real GNP per person

• A)more in a poor country than a rich country.The increase in real GNP per person will be larger if the addition to capital is from domestic rather than foreign investment.
• B)more in a poor country than a rich country.The increase in real GNP per person will be larger if the addition to capital is foreign rather than from domestic investment.
• C)less in a poor country than a rich country.The increase in real GNP per person will be larger if the addition to capital is from domestic rather than foreign investment.
• D)less in a poor country than a rich country.The increase in real GNP per person will be larger if the addition to capital is foreign rather than from domestic investment.

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Definitions:

Expected Value

The weighted average of all possible values that a random variable can take on, weighted by the probabilities of those values.

Payoffs

The outcomes or returns of a decision or action, often expressed in terms of profit or loss.

Risky Undertaking

An action or venture involving a high degree of uncertainty and potential for loss or failure.

Net Profit

The amount of money that remains from revenues after all expenses, taxes, and costs have been subtracted.