For the utility function U = Wa, what values of "a" correspond to being risk averse, risk neutral, and risk loving?
What will be an ideal response?
0 < a < 1 implies risk averse.
a = 1 implies risk neutral.
a > 1 implies risk loving.
You might also like to view...
When actual output equals potential output and the inflation rate is stable, the economy is said to be in ________ equilibrium.
A. contractionary B. short-run C. expansionary D. long-run
Assume a one year U.S. bond pays 4.0% interest and a similar U.K. bond pays 5.2% interest. Which of the following changes will establish interest rate parity?
a. The British pound would be expected to appreciate by 1.2% against the U.S. dollar. b. The U.S. dollar would be expected to depreciate by 1.2% against the British pound. c. The British pound would be expected to depreciate by 1.2% against the U.S. dollar. d. The British pound would be expected to appreciate by 9.2% against the U.S. dollar. e. The U.S. dollar would be expected to appreciate by 9.2% against the British pound.
Consider GDP calculated according to the expenditures approach. Which of the following components of GDP would need to decrease for GDP to increase?
a. Imports b. Consumption c. Exports d. Investment e. Government spending
Who is a price taker in a competitive market?
a. buyers only b. sellers only c. both buyers and sellers d. neither buyers nor sellers