(Last Word) Passively managed funds produce higher rates of return for investors than actively managed funds because:
A. trading and management costs are higher with actively managed funds.
B. passively managed funds invest in riskier assets that have higher rates of return.
C. actively managed funds invest in riskier assets that have not reached expected rates of
return.
D. actively managed funds are taxed, while passively managed funds are not taxable.
A. trading and management costs are higher with actively managed funds
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One reason the oversimplified multiplier is incorrect is that inflation
a. increases the multiplier by increasing investment spending. b. increases the multiplier by increasing consumer spending. c. decreases the multiplier by increasing net exports. d. decreases the multiplier by decreasing consumer spending.
Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then:
Which of the following is not a property of standard indifference curves in a leisure-consumption model?
A. Higher indifference curves (to the northeast) indicate higher levels of utility. B. Indifference curves tend to be downward sloping. C. Indifference curves intersect one another. D. Indifference curves tend to be convex to the origin. E. There is an indifference curve passing through every leisure-consumption bundle.
Refer to the table above. When does diminishing marginal returns to capital set in?
A) When the second machine is used B) When the third machine is used C) When the fourth machine is used D) When the fifth machine is used