Suppose That a Country Has External Wealth of $1 Billion

question 64

Multiple Choice

Suppose that a country has external wealth of $1 billion in 2014. What is the future value of this external wealth at the end of 2016, assuming a world interest rate of 10% per annum and no additions or subtractions to external wealth from trade balance surpluses or deficits during the period?

• A) $1.1 billion
• B) $1.2 billion
• C) $1.21 billion
• D) $0.812 billion

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Definitions:

Groupthink

A psychological phenomenon where the desire for harmony or conformity in a group leads to an irrational or dysfunctional decision-making outcome.

Designated Leader

An individual who has been officially chosen or appointed to guide or direct a group, team, or organization.

Bystander Effect

A social psychological phenomenon where individuals are less likely to offer help to a person in need when other people are present.

Ambiguous

Something that is open to more than one interpretation, explanation, or meaning and is not explicitly defined or clear.