The variance of a portfolio containing n assets with independent returns:
A. increases as n increases.
B. decreases as n increases.
C. does not change in a predictable way when n increases.
D. is constant for any n greater than two.
Answer: B
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Deflation:
a. was prevalent during the oil shocks of the 1970s. b. will cause consumers' purchasing power to shrink. c. has been persistent in the U.S. economy since the Great Depression. d. none of these.
If the measured elasticity of supply coefficient equals 0.6, then supply is: a. perfectly elastic. b. elastic
c. unit elastic. d. inelastic.
Which of the following is an example of a change in culture affecting the production of a good or service:
A. A shortage of chocolate chips causes a cookie company to stop production. B. Laws banning smoking in restaurants result in a decrease in demand for cigarettes. C. An oil spill in the ocean causes local seafood restaurants to lose business. D. The "green movement" leads to an increase in demand for recycled products.
If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium:
A. output would necessarily rise. B. output would necessarily fall. C. price level would necessarily fall. D. price level would necessarily rise.