Which of the Following Would Do the Most to Reduce

question 41

Multiple Choice

Which of the following would do the most to reduce a trade deficit?

• A)Increase domestic saving.
• B)Increase political stability and respect for property rights.
• C)Negotiate with other countries to get them to reduce their trade restrictions.
• D)Impose higher tariffs on imported goods.

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Definitions:

Overall Economy

The sum total of all the economic activity within a given region or country, encompassing all sectors, markets, and levels of income.

Portfolio Beta

A measure of the volatility of a portfolio relative to the overall market; the aggregate beta of all the investments in the portfolio.

Systematic Risk

The inherent risk associated with the entire market or market segment, undiversifiable through portfolio diversification.

Unsystematic Risk

The risk associated with a specific company or industry, which can be mitigated through diversification of an investment portfolio.