When Government Spending Is Added to the Basic Macroeconomic Model

question 131

Multiple Choice

When government spending is added to the basic macroeconomic model, the multiplier for G would

• A)be higher than the multiplier for autonomous spending.
• B)be lower than the multiplier for autonomous spending.
• C)be equal to the multiplier for autonomous spending.
• D)have no relationship to the autonomous spending multiplier.

Distinguish between different types of risks and the concept of risk aversion in investment choices.

Identify and calculate risk premiums and understand their role in compensating for systematic risk.

Understand portfolio beta as a measure of systematic risk and how it is computed from individual investment betas.

Recognize the effects of stock price changes on portfolio value.

---

Definitions:

Cut Corners

To undertake actions in the easiest, quickest, or cheapest way, often by skipping necessary steps or violating rules.

Profit

The financial gain achieved when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Internal Locus of Control

The belief that one controls their own fate and outcomes are primarily the result of their own efforts.

Own Effort

The use of personal skills and labor to achieve a task or goal without external help.