A competitive capital market is important to society because it directs resources toward projects that
What will be an ideal response?
are valued more highly than their cost.
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Refer to the scenario above. If the economy is currently on F2 and produces Y3 level of output, a leftward shift of the labor demand curve with no change in productivity will cause output to ________
A) increase from Y3 to Y4 B) decline from Y3 to Y1 C) decline from Y3 to Y2 D) increase from Y3 to Y5
Suppose disposable income increases from $5 trillion to $6 trillion. As a result, consumption expenditure increases from $4 trillion to ________. This result means the MPC equals ______.
A. $4.5 trillion; 4.50 B. $5 trillion; 0.80 C. $4.8 trillion; 0.80 D. $6 trillion; 1.00
Which of the following pairs of portfolios exemplifies the risk-return tradeoff?
a. For Portfolio A, the average return is 6 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 6 percent and the standard deviation is 25 percent. b. For Portfolio A, the average return is 5 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 15 percent. c. For Portfolio A, the average return is 5 percent and the standard deviation is 25 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 15 percent. d. For Portfolio A, the average return is 5 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 25 percent.
To guide a person through complicated decisions such as whether to get a particular credit card, behavioral economists advocate electronic disclosure in which characteristics such as late fees and high interest rates would be explained clearly. They call this type of nudge a(n):
A. encouragement nudge. B. information nudge. C. pricing nudge. D. advantageous default option nudge.