A pervasive tradeoff in financial markets relates risk to expected returns. Which of the following statements reflects this relationship?
a. The higher the risk of an asset, the lower the expected return on the asset.
b. There is usually no relationship between risk and return.
c. The higher the risk of an asset, the higher the expected return on the asset.
d. The return on an asset is normally positively related to the risk of comparable assets.
e. The return on a risky asset cannot be compared with the return on a risk free asset.
c
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What is the difference between economic growth and economic development?
A. Economic growth examines qualitative changes in the processes by which potential output increases over time, whereas economic development examines how a country moves from one point on its production possibility curve to another point on the curve. B. Economic growth implies qualitative changes in productive processes whereas economic development requires quantitative change in virtually every aspect of life. C. Economic growth implies quantitative changes in productive processes whereas economic development requires widespread structural changes in the way people live. D. There is no difference between the two terms.
Exhibit 4-6 Demand and supply curves
In Exhibit 4-6, the demand curve has shifted from D1 to D2 and, simultaneously, the supply curve has shifted from S1 to S2. Describe these actions in this market.
A. Market supply has decreased, and market demand has increased. B. Market supply has increased, and market demand has decreased. C. Market supply has decreased, and market demand has decreased. D. Market supply has increased, and market demand has increased.
Explain how the long-run average cost curve is constructed graphically
What will be an ideal response?
The World Bank:
A. provides military assistance to those nations interested in improving national defense. B. makes and guarantees loans for basic development projects such as the construction of dams, roads, and schools. C. provides gold for DVCs that want to go on the gold standard. D. provides short-term loans to DVCs that are incurring balance of payments deficits.