Economics Mcqs

An increase in the prevailing interest rate ?

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An increase in the prevailing interest rate ?

A. increases the present value of future returns from investment and increases investment
B. decreases the present value of future return from investment and decreases investment
C. decreases the present value of future returns from investment and increase investment
D. increases the present value of future returns from investment and decreases investment

It is difficult for an actively managed investment fund to outperform an index fund because ?

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It is difficult for an actively managed investment fund to outperform an index fund because ?

A. stock markets tend to be inefficient
B. all of these answers
C. index funds are able to buy undervalued stocks
D. actively managed funds trade more often and charge fees for their alleged expertise

Compared to a portfolio composed entirely of shares a portfolio that is 50 percent government bonds and 50 percent shares will have a ?

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Compared to a portfolio composed entirely of s a portfolio that is 50 percent government bonds and 50 percent s will have a ?

A. lower return and a lower level or risk
B. lower return and a higher level of risk
C. higher return and a lower level or risk
D. higher return and a higher level of risk

If two countries start with the same real GDP/person and one country grows at 2 percent while the other grows at 4 percent ?

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If two countries start with the same real GDP/person and one country grows at 2 percent while the other grows at 4 percent ?

A. one country will always have 2 percent more real GDP/person than the other
B. the standard of living in the country growing at 4 percent will start to accelerate away from the slower growing country due to compound growth
C. the standard of living in the two countries will converge
D. Next year the country growing at 4 percent will have twice the GDP/person as the country growing at 2 percent