Which One of the Following Conditions Can Be Effectively Eliminated

question 97

Multiple Choice

Which one of the following conditions can be effectively eliminated through portfolio diversification?

• A) a general price increase nationwide
• B) an interest rate reduction by the Federal Reserve
• C) increased government regulation of auto emissions
• D) change in the political party that controls Congress

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Definitions:

U.S. Residents

Individuals who live in the United States, including citizens, permanent residents, and long-term visitors.

Aggregate Demand

The amassed demand for all types of goods and services in an economic domain, set at a uniform price level across a certain time range.

Inventories

The goods and materials that a business holds with the purpose of resale or production in the future.

Wealth Effect

A behavioral economic theory suggesting that consumers spend more as the value of their assets rises, particularly visible in the increase in spending following a rise in home values or stock market portfolios.