A Ponzi scheme has the following characteristics, except:
A. It promises a much higher expected return relative to the investment risk involved
B. It seems to involve a significantly lower risk relative to the expected returns promised
C. Its implied risk-return combination (or point) lies below the security market line
D. Trust plays a very important role, with investors believing in the promoter's ability to somehow prevent arbitrage
C. Its implied risk-return combination (or point) lies below the security market line
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An example of "investment" in the national income accounts is the purchase of
A) a new van by a potter, who packs it with his wares and travels to art shows. B) 100 shares of Intel stock on the New York Stock Exchange. C) a 100-year-old house that was just put on the protected historic sites list in the year in question. D) a U.S. government bond.
Refer to Figure 14.2. Other things equal, a decrease in inflationary expectations would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point C to point B. D) point B to point C.
Other things equal, an increase in aggregate supply will cause:
a. a decrease in equilibrium real GDP and a decrease in the equilibrium price level. b. an economic contraction. c. an increase in equilibrium real GDP and an increase in the equilibrium price level. d. cost-push inflation. e. a reduction in unemployment and a decline in inflation.
?Marginal cost eventually increases as output increases due to the effect of _____.
a. ?constant fixed cost b. ?economies of scale c. ?increasing total cost d. ?diminishing marginal product of inputs e. ?increasing average cost