A potential drawback of using the standard deviation to measure risk is that
A) positive and negative deviations from the mean cancel each other out.
B) both positive and negative deviations are included to compute deviations around the mean.
C) the probability distribution of returns is symmetrical.
D) None of the above.
B
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Assume the economy is in a recession and the Federal government decides to cut personal income tax rates. All else equal, the cut in tax rates should
A) increase consumption expenditures and cause real GDP to increase relative to potential GDP. B) increase the nominal interest rate and cause potential GDP to increase relative to real GDP. C) decrease the real interest rate and decrease expectations of inflation. D) increase the target interest rate and cause real GDP to fall relative to potential GDP.
Economic growth can be defined as
A) the rate of growth in the productivity of labor. B) the rate of growth in the productivity of capital. C) the rate of growth of labor plus the rate of depreciation of capital. D) the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital.
Which of the following actions by the Fed would be most likely to stimulate the economy?
A) Purchasing bonds on the open market. B) Increasing interest rates from 3% to 5% to encourage more savings. C) Increasing the required reserve ratio to ensure that banks stay solvent. D) Raising the discount rate charged to commercial banks.
ADT, the home security company, advertises the need for home surveillance products to appeal to which level of Maslow's Hierarchy of needs?
A. safety B. self-actualization C. love D. esteem E. physiological