Risk aversion helps to explain various things we observe in the economy, including
a. adherence to the old adage, "Don't put all your eggs in one basket.".
b. insurance.
c. the risk-return trade-off.
d. All of the above are correct.
Ans: d. All of the above are correct.
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A supply curve:
a. has a negative slope. b. is based on the assumption of a stable demand curve. c. illustrates the negative relationship between price and quantity supplied. d. illustrates the positive relationship between price and quantity supplied. e. shifts about in random fashion.
Which of the following is an example of microeconomic analysis?
a. impact of taxation on national income b. rate of increase in the national debt c. relationship between inflation and interest rates set by the Federal Reserve d. none of the above
What is causing South Africa’s youth unemployment problem?
a. Inability to devalue its currency b. High number of laws restricting hiring and firing c. High current account deficit d. Youth lack necessary work skills.
(Figure: Three AD Curves) Beginning at Point A in the accompanying diagram, a positive money shock could result in a short-run growth rate of:
What will be an ideal response?