In a Macroeconomic Model Designed to Explain Why Some Countries

question 15

Multiple Choice

In a macroeconomic model designed to explain why some countries grow faster than others,which of these variables is likely to be endogenous?

• A)investment
• B)economic policies
• C)geographic size
• D)population
• E)none of the above

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Definitions:

Pre-Tax Cost

The expense of an investment or project before accounting for taxes; it reflects the gross cost.

Net Advantage

An evaluation metric that identifies the benefits minus the costs of pursuing a specific action or investment.

Depreciation Tax Shield

A tax reduction achieved through deducting depreciation expenses, lowering taxable income.

Straight-Line Method

A method of calculating depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.