Because of the relationship between an asset's real rate of return and its risk, one would expect to find all of the following, except one. Which one?
A) Corporate stocks have higher rates of return than U.S. Treasury bonds.
B) Corporate stocks have higher rates of return than U.S. Treasury bills.
C) Corporate stocks have higher rates of return than corporate bonds.
D) Stocks of smaller companies have higher expected rates of return than stocks of larger companies.
E) Mutual funds including stocks of companies in politically volatile developing countries do not have as high a rate of return as mutual funds restricted to stocks of companies in developed economies.
E
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A temporary beneficial productivity shock would
A) shift the labor supply curve down and to the right. B) increase the level of employment. C) increase future income. D) increase the expected future marginal product of capital.
On a linear demand curve, the lower the price
A) the less elastic is demand. B) the more elastic is demand. C) the elasticity equals -1. D) the elasticity equals zero.
Opponents of inflation targets say that: a. such targets encourage workers to expect a low and stable inflation rate and hold down demands for wage increases. b. the Fed pays less attention to jobs and economic growth when it sets such targets
c. such targets encourage firms to plan on a low and stable inflation rate and hold down price increases. d. such targets encourage investors to plan on a low and stable inflation rate and hold down demands for interest rate increases. e. the Fed pays more attention to jobs and economic growth when it sets such targets.
A basic tenet of the theory of the firm is that the firm's primary objective is to
A. produce a given level of output at a specified cost. B. operate for the benefit of society. C. stay out of debt. D. maximize economic profits.