The Following Question Are Based on the Following Information

question 67

Multiple Choice

The following question are based on the following information:

-If intended spending is greater than GDP

• A) firms will experience unexpected increases in their planned inventory levels.
• B) consumption expenditures must be greater than disposable income.
• C) firms will attempt to increase production.
• D) GDP will fall.
• E) the economy is in declining equilibrium.

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Definitions:

Risk-Adjusted Returns

A measure of the return on an investment relative to the risk of that investment, often used to assess the performance of investment managers.

Large Firms

Companies with a significant market capitalization, often leading in their respective industries and markets due to their size and influence.

Small Firms

Companies with a relatively small market capitalization, often characterized by higher growth potential and risk.

Book-to-Market Ratios

A financial metric comparing a company’s book value to its market value, used to identify potentially undervalued or overvalued stocks.