Discuss how the goals of central bankers can be linked to risk and the ability or inability of individuals to eliminate this risk.
What will be an ideal response?
We learned in a previous chapter that individuals face two types of risk in their investment decisions, idiosyncratic risk and systematic risk. Idiosyncratic risk can be eliminated through diversification. However systematic risk affects everyone and cannot be eliminated through diversification. The specific goals that central bankers pursue are meant to provide a more stable economic environment that reduces the systematic risk faced by society.
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The economic efficiency of any process will be evaluated by
A) the proportion of marginal to non-marginal costs. B) the ratio of work done to energy supplied. C) comparing what is gained from what is sacrificed. D) the relationship of supply to demand.
In 2008, Agriculture Secretary Ed Schafer announced that Chile's Livestock and Agricultural Service approved the U.S. inspection, control and certification systems for poultry, allowing these products to enter the Chilean market
What is NOT an effect of this change in Chilean policy on the Chilean poultry market? A) Chile's tariff revenue will increase. B) The quantity of poultry consumed in Chile will increase. C) The quantity of Chilean imports will increase. D) The price for poultry in Chile will decrease.
An essential characteristic of a perfectly competitive market is:
A. sellers are selling unique products. B. buyers have complete control over the market price and sellers have none. C. buyers and sellers have no control over the market price. D. sellers have complete control over the market price and buyers have none.
Suppose in the year 2000 Ken earned $60,000 per year and that in 2015 he earned $78,000 per year. If the CPI in the year 2000 was 172.2 and in 2015 was 236.7, which of the following statements is correct? a. Ken's standard of living got better from 2000 to 2015
b. If Ken had earned $81,000 in 2015, his standard of living would have improved relative to his income in 2000. c. Ken would have needed to earn $87,000 or more in 2015 for his standard of living to have improved relative to his income in 2000. d. If Ken had earned $83,000 in 2015, his standard of living would have improved relative to his income in 2000.