The Russian wheat crop fails, driving up wheat prices in the U.S. This is an example of:
A. idiosyncratic risk.
B. quantifiable risk.
C. diversification.
D. systematic risk.
Answer: A
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If depository insurance exists, bank managers may make riskier loans than they would have otherwise, which is an example of
A) adverse selection. B) regulatory lag. C) irrational behavior. D) moral hazard.
The economic efficiency approach to emission control provides the polluting firm with
a. a license produce as much emissions as it wants b. the option of choosing between focusing on profit or cost c. a process for determining the optimum quantity of emissions d. more flexibility in selecting the most cost effective method of control e. a subsidy for producing additional emissions
A forecaster used the regression equationQt = a + bt + c1D1 + c2D2 + c3D3and quarterly sales data for 1996 I - 2013 IV (t = 1, ..., 64) for an appliance manufacturer to obtain the results shown below. Q is quarterly sales, and D1, D2 and D3 are dummy variables for quarters I, II, and III. 
At the 5 percent level of significance, is there a statistically significant trend in sales?
A. Yes, because 2.14 > 0.05. B. Yes, because 0.700 > 0.05. C. No, because 0.0362 > 0.01. D. Yes, because 0.0362 < 0.05. E. both c and d
The two labor markets in the "dual labor market" are
A) southern versus northern. B) western versus eastern. C) English speaking versus non-English speaking. D) domestic versus foreign. E) none of the above