Which of the Following Is a True Statement

question 33

Multiple Choice

Which of the following is a true statement?

• A) It is easy to predict the probability and length of a foreign country's recession.
• B) Although economists understand the relationship between risk and return, they have been unable to develop a way to quantify it.
• C) There is a direct relationship between risk and expected return.
• D) Risk and the likelihood of realizing future cash flows from an investment are unrelated.
• E) Riskless investments do not usually earn a positive return.

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Definitions:

Public Choice Theory

An economic theory that studies how public sector decisions are made, considering individuals in the public sector as self-interested agents and applying the tools of economics to political science.

Government Decision Making

The process by which governments choose between different policies, actions, or strategies to address specific public issues or problems.

Rent-Seeking Behavior

The actions by persons, firms, or unions to gain special benefits from government at the taxpayers’ or someone else’s expense.

Public Choice Theory

An economic theory that applies principles of economics to political science, analyzing how public decisions are made and the behaviors of voters, politicians, and bureaucrats.