When households practice diversification it means that they are buying which of the following?
a. stocks or bonds from only one company to increase their risks
b. stocks or bonds from only one company to lower their risks
c. stocks and bonds from a wide-range of companies to increase their risks
d. stocks and bonds from a wide-range of companies to lower their risks
d. stocks and bonds from a wide-range of companies to lower their risks
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Calculations make it clear that for the majority of current retirees, the rate of return on Social Security taxes and benefits was
A. lower than what would have been generated in private stock-market investments. B. greater than what would have been generated in private stock-market investments. C. riskier than what would have been generated in private stock-market investments. D. roughly equal to what would have been generated in private stock-market investments.
What two factors need to increase in order to increase potential output in an economy?
What will be an ideal response?
A market is a natural monopoly when:
A. a good is produced most economically by several firms. B. a good is produced most economically by one firm. C. the government grants a firm a patent on a good. D. the firm's average cost function is everywhere upward sloping.
A compensating wage differential is
a. the difference between the wage of an individual working in favorable conditions and the wage of an individual working in unfavorable conditions b. compensation paid to an individual for working in a less desirable environment c. premium paid to a security holder to compensate him for bearing a higher risk d. Only A&B