Exam 16: Applying the Basics: Special Topics in Economics

Which of the following provides the strongest argument for young people making regular payments into a retirement program that invests these funds in a diverse set of stocks?

Measured as a share of the economy, government expenditures on ____ have declined during the last four decades.

Proved reserves of natural gas and oil

Which of the following is true?

Consider a stock with a 50 percent probability of zero net earnings and a 50 percent probability of net earnings equal to $20 per share each year continuously in the future. Furthermore, assume that people are risk averse: That is, they will have to be compensated for uncertainty accompanying variation in their future wealth. If the interest rate were 5 percent, how much would people be willing to pay for a share of this stock?

Which of the following is true?

If Apple Computer Corporation constitutes a sizeable share of your current stock holdings, the purchase of which of the following stocks would provide you with the greatest reduction in risk?

A lower interest rate will increase the present value of future income and thereby

During the Great Depression of 1929-1933,

How has the structure of the personal income tax changed and the share of taxes paid by various income groups changed in recent decades?

Which of the following will tend to result in the least variation in the expected real rate of return from the ownership of stocks?

Measured as a share of the labor force, union membership was at its highest level in the United States during the

Which of the following is true?

The experience of the Teamsters in the late 1970s and early 1980s suggests that

Which of the following is true?

If the interest rate were 12.5 percent, how much would people be willing to pay for a stock that was certain to yield a $20 per share stream of net earnings continuously in the future?

When the federal government owns parks that are funded by tax dollars

Which of the following is true?

The concept of "proved reserves" refers to the amount of a resource that can be produced

The random walk theory indicates that