A portfolio’s performance is its yield to the holder.
Answer the following statement true (T) or false (F)
True
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Samantha decides to withdraw $10,000 from her savings account and invest it all in the stock market. Her total economic costs
A) equal $10,000. B) are independent of the interest she enjoyed in her savings account. C) are affected by the interest she enjoyed in her savings account. D) are determined solely by the commission she is charged for the purchase of stock.
Other things remaining the same, the greater the expected profit
A) the less the amount of investment. B) the greater the amount of investment. C) the steeper is the investment demand curve. D) the flatter is the investment demand curve.
Consider the Taylor rule for the target of the federal funds rate. Suppose the equilibrium real federal funds rate is 2 percent, the target rate of inflation is 3 percent, the current inflation rate is 3 percent, real GDP equals potential real GDP, and
the weights are 1/2 for the inflation gap and the output gap. Using the Taylor rule, what does the target for the federal funds rate equal? Next, if the Federal Reserve lowered the target for the inflation rate to 1 percent, how much would the target for the federal funds rate change? What will be an ideal response?
The saving rate has the following characteristic in Solow's exogenous growth model
A) it increases with output. B) it first decreases, then increases with output. C) it first increases, then decreases with output. D) it is constant.