Consider the Circular Flow of Expenditure and Income in the Canadian

question 46

Multiple Choice

Consider the circular flow of expenditure and income in the Canadian economy. Which of the following is an
Injection into the circular flow?

• A) Loblaws imports cheese from Switzerland.
• B) You pay GST on your purchases.
• C) You contribute to your company pension plan.
• D) A Toyota plant in Canada imports car parts from Japan.
• E) The Government of Canada purchases new Coast Guard ships.

---

Definitions:

Optimal Risky Portfolio

The combination of investments that provides the highest expected return for a given level of risk or the lowest risk for a given level of expected return.

Expected Utility

A theory in economics that assesses the utility or satisfaction an agent expects to receive from different outcomes, taking into account their risk preferences.

Less Risk-averse Investors

Less risk-averse investors are those willing to take on greater risks for the potential of higher returns, as opposed to being risk-averse who prefer safer, lower-return investments.

Probability Distribution

A mathematical description of the likelihood of various outcomes from a random event or experiment.