Which of the following is not correct?
a. The higher average return on stocks than on bonds comes at the price of higher risk.
b. Risk-averse persons will take the risks involved in holding stocks if the average return is high enough to compensate for the risk.
c. Insurance markets reduce risk, but not by diversification.
d. Risk can be reduced by placing a large number of small bets, rather than a small number of large bets.
c
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The presence of navigable rivers and fertile soil is seen as a source of economic prosperity under the:
A) location hypothesis. B) geography hypothesis. C) culture hypothesis. D) institutions hypothesis.
One complication in the process of reducing inflation by creating recessions is that the price level
a. adjusts more quickly to recessionary gaps than to inflationary gaps. b. does not apply as it does in inflationary gaps. c. always rises. d. rarely falls.
A firm that would experience higher average total cost by increasing production is operating with excess capacity
a. True b. False Indicate whether the statement is true or false