Assume that two investment opportunities have identical expected values of $100,000. Investment A has a variance of 25,000, while investment B's variance is 10,000
We would expect most investors (who dislike risk) to prefer investment opportunity A) A because it has less risk.
B) A because it provides higher potential earnings.
C) B because it has less risk.
D) B because of its higher potential earnings.
C
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Automatic stabilization refers to
A) the policy of lowering tax rates during a recession. B) the policy of increasing autonomous G during a recession. C) the effect of income taxes in lowering the multiplier effect of changes in autonomous planned spending. D) all of the above.
If the demand decreases in a perfectly competitive market, firms will likely:
A. experience negative profits in the short run. B. experience zero profits in the long run. C. exit the market in hopes of capturing profits elsewhere. D. All of these are true.
When a government splits a natural monopoly vertically, it is breaking the company up:
A. along its stages of production. B. into smaller companies providing the same goods. C. in order to maximize its profits. D. in order to capture all efficiencies possible.
Which of the following would be recorded in the U.S. goods export account?
a. Harry, an American citizen, spends 1,000 francs on vacation in the south of France. b. A machine shop in Ohio purchases a grinder made in Italy. c. Martha receives a $50 dividend check on stock she owns in a business in Germany. d. The U.S. government subsidizes American farmers for planting corn for export. e. France purchases a new jet fighter aircraft from the Boeing Company in the United States.