Suppose you had $1000 and were deciding between two investments. One pays 5% a year for two years while the other pays 8% the first year and 2% the second year. Which investment would provide a higher return?
What will be an ideal response?
The first investment which earned 5% a year for two years would result in $1,102.50 after two years. The second investment would result in $1,101.60. Thus, the first investment provides the higher return.
Economics
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An increase in the income tax ________ potential GDP by shifting the labor ________ curve ________
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Economics