Answer the following statement(s) true (T) or false (F)
1. Speculators will sell futures contracts when they believe future demand will be lower than suppliers expect.
2. Diversification tends to raise the standard deviation of a portfolio.
3. Risk-averse investors choose to hold only two assets: a risk-free asset and a market portfolio
4. When faced with two portfolios that offer the same expected return, a risk-averse investor prefers the one with the higher standard deviation.
5. There is only one possible market portfolio-the portfolio consisting of all the risky assets in the economy.
1. True
2. False
3. False
4. True
5. False
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If the Fed wished to decrease GDP, it could
A) increase the reserve requirement or conduct an open market sale. B) increase the reserve requirement or conduct an open market purchase. C) decrease the reserve requirement or conduct an open market sale. D) decrease the reserve requirement or conduct an open market purchase.
The above table gives data for the nation of Mojo. At what level of real GDP is the unplanned inventory change equal to $1.75 trillion?
A) $12.0 trillion B) $6.0 trillion C) $9.0 trillion D) $3.0 trillion E) $0.0 trillion
A firm that produces chemical solvents creates some air pollution because of the emissions from its manufacturing facilities. A tax is imposed on the firm, equal to the costs of environmental damage caused by a unit of the emissions
What is the result? A) The quantity of chemical solvents produced now will be the efficient amount. B) Demand for the chemical solvents will increase. C) Demand for the chemical solvents will decrease. D) Consumers of the chemical solvents will be willing to pay the full amount of the tax, and so the quantity produced will be unaffected.
In economics, secondary effects refer to the
a. best alternative that must be forgone as the result of a choice. b. unintended consequences of a change that are not immediately identifiable but are felt only with time. c. immediate and visible intended consequences of a change. d. impact of the scarcity of resources on the scarcity of the goods that are produced with those resources.