When the National Activity Index Is at Zero, the Economy

question 101

Multiple Choice

When the National Activity Index is at zero, the economy is growing at _____ rates. Negative values imply _____ trends. Positive values imply that growth is _____ the long-term trend.

• A) rapid; slowing; equal to
• B) slow; accelerating; equal to
• C) historical; slowing; faster than
• D) historical; accelerating; slower than

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Definitions:

Money Market Fund

A type of mutual fund that invests in high-quality, short-term debt instruments, cash, and cash equivalents and is considered to be relatively low risk.

Portfolio Management

The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.

Growth Stock Fund

A mutual fund that invests primarily in the stocks of companies believed to have above-average potential for growth in revenue and earnings.

Zero-Coupon Bonds

Bonds that do not pay periodic interest payments and are instead issued at a substantial discount to their face value, with the face value being paid at maturity.