A Flight to Quality Refers to a Move by Investors

question 45

Multiple Choice

A flight to quality refers to a move by investors:

• A) away from bonds towards stocks.
• B) towards securities of other countries and away from U.S. Treasuries.
• C) towards precious metals and away from U.S. Treasury bonds.
• D) away from low-quality bonds towards high-quality bonds.

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Definitions:

Profit-Maximizing Principle

The concept that firms operate to achieve the highest profit possible, which involves setting output where marginal costs equal marginal revenues.

Marginal Analysis

An examination of the benefits and costs of one additional unit of production or consumption.

Marginal Benefit

Refers to the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Marginal Benefit

The additional satisfaction or utility gained by consuming one more unit of a good or service, important for decision-making in consumption and production.