In a Small Asian Country,it Is Estimated That Changing the Level

question 10

Multiple Choice

In a small Asian country,it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $4 million to $6 million.What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $16 million,assuming no technological change and no change in the hours of work?

• A)GDP would increase further,but by less than $2 million.
• B)GDP would increase further by exactly $2 million.
• C)GDP would increase further by more than $2 million
• D)GDP would increase further by exactly $8 million.

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Definitions:

Investment Center

A division or unit within a company for which the manager has responsibility for and authority over the unit's revenues, costs, and investments.

Decentralized Units

Subdivisions within a larger organization that operate with a degree of autonomy, often making their own decisions and managing their own operations.

Authority

Authority refers to the power or right given to an individual or organization to make decisions, direct others, and enforce obedience.

Profit Margin

A financial metric indicating the percentage of income left over from revenues after accounting for costs and expenses.