Answer the following statement(s) true (T) or false (F)
1. People have rational expectations when their predictions are correct more often than not.
2. Even when econometric equations predict very well, they can be entirely useless as guides to policy.
3. The standard deviation of a portfolio is exactly equal to the average standard deviations of the individual stocks.
4. A risk-averse individual always prefers the basket with the highest standard deviation when choosing among baskets with the same expected value.
5. Uninsurable risks is one reason why fair-odds insurance is not always available.
1. False
2. False
3. True
4. False
5. False
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Consumer spending accounts for about 50 percent of GDP.
Answer the following statement true (T) or false (F)
You should invest in a project if the cost you incur today is greater than the present value of the future payments from the project
Indicate whether the statement is true or false
Scarcity refers to the situation in which
A) unlimited wants exceed limited resources. B) a country's population is larger than its resource base. C) a nation's poverty level increases faster than its population. D) unlimited resources exceed limited wants.
A perfectly competitive firm produces 50 units of output, at equilibrium, in the short run. The total cost borne by the firm is $300 and the average revenue is $2 . Therefore, the firm:
a. is just breaking even. b. is earning positive profits. c. is facing a positively sloped demand curve. d. is suffering losses. e. is experiencing diseconomies of scale.