As wealth decreases, which of the following is likely to account for a larger fraction of a saver's portfolio?
A) corporate stock
B) corporate bonds
C) U.S. government securities
D) checking account balance
D
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What has happened to countries that did not participate in the globalization of the world economy?
a. The fraction of the population living below the poverty line in these countries has decreased. b. These countries have been mired in a low-growth path and are experiencing high poverty rates. c. The socialist policies in these countries have caused a big change in the income distribution, something that globalization could not have achieved. d. The growth rate of these countries is stronger than the First World countries. e. The domestic industries in these countries have experienced robust growth.
The process of analyzing a problem in reverse-starting with the last choice, then the second-to-last choice, and so on, to determine the optimal strategy-is called:
A. forward thinking. B. backward working. C. backward thinking. D. backward induction.
In the basic Keynesian model, a decrease in transfer payments:
A. increases potential output. B. reduces potential output. C. increases short-run equilibrium output. D. reduces short-run equilibrium output.
Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly decreases. What might happen to the typical firm in the long run?
a. It would experience no change from the original equilibrium b. It would experience a higher equilibrium price c. It would experience a lower equilibrium price d. It would experience the same equilibrium price but would increase output e. It would experience a lower average total cost and would increase output