Which of the Following Will Not Occur When Government Policies

question 101

Multiple Choice

Which of the following will not occur when government policies are enacted to make the distribution of income more equitable?

• A)People will alter their behaviors.
• B)Incentives will be distorted.
• C)Total utility will likely remain constant.
• D)The allocation of resources will be less efficient.

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Definitions:

Tail Risk

Risk of extreme events in the far tail of the probability distribution.

Worst-case Scenario

A situation where the most unfavorable conditions lead to the worst possible outcome for a project or investment.

Downside Exposure

The potential loss in value of an investment due to market declines, highlighting the risk in bearish scenarios.

VaR (Value At Risk)

A statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame.