The "Capital Asset Pricing Model" measures the risk premium for a capital investment by comparing the expected return on that investment with the
A) average return on other investments of similar risk.
B) average return on the past several years' investments made by the firm.
C) expected return on the entire stock market.
D) expected return on the government bond market.
E) expected return on the corporate bond market.
C
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A firm is more likely to produce its own input if all of the following are true except which one?
A) The firm has trade secrets. B) The firm is concerned about the hold-up problem. C) The firm experiences diseconomies of scale when producing the input. D) The transportation cost of the input is expensive.
An increase in demand will cause a(n)
a. increase in supply b. decrease in supply c. decrease in quantity supplied d. increase in quantity supplied e. decrease in equilibrium price
From the perspective of the classical model, many economists would say that the most important automatic stabilizer is
a. taxes b. imports c. interest rates d. transfer payments e. passage of time
The market demand curve for a given product may be downward sloping even if no person in that market has a downward sloping demand curve
Indicate whether the statement is true or false