For the purpose of calculating GDP, investment is spending on
a. stocks, bonds, and other financial assets.
b. real estate and financial assets such as stocks and bonds.
c. capital equipment, inventories, and structures, including household purchases of new housing.
d. capital equipment, inventories, and structures, excluding household purchases of new housing.
c
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Investment is a(n) ________ that changes the ________ of capital.
A. stock; flow B. liability; asset C. asset; liability D. flow; stock
Refer to Scenario 5.10. If Hillary invests 30 percent of her savings in the real estate project and remainder in Treasury bills, the standard deviation of her portfolio is:
A) 0 percent. B) 12 percent. C) 28 percent. D) 30 percent. E) 40 percent.
When a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing
a. scarcity. b. shortages. c. inefficiencies. d. inequities.
If a firm perceived that the other firm in an implicit pricing agreement dropped its price in an attempt to gain market share, then its most likely response would be to:
A. merge with the other firm. B. engage in a price war. C. raise price to punish the other firm. D. keep its price the same.