-In the Above Figure, If the Economy Is Initially at Point

question 128

Multiple Choice

-In the above figure, if the economy is initially at point B and taxes are raised, if potential GDP does not change then the economy will move to point

• A) move to point D.
• B) move to point A.
• C) move to point C.
• D) stay at point B.

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Definitions:

Systematic Risks

Risks that impact the entire market or economy, often unavoidable by diversification.

Diversified Portfolio

An investment strategy that spreads investments across various assets to reduce risk.

Standard Deviation

A statistical measure of the dispersion or variability within a data set, often used to quantify the risk associated with a variable’s average value.

Diversification

Diversification is an investment strategy that involves spreading investments across various financial instruments, industries, or other categories to reduce risk.