Aggregation Reduces the Standard Deviation of Demand

question 56

Multiple Choice

Aggregation reduces the standard deviation of demand

• A) only if demand across the regions being aggregated is perfectly positively correlated.
• B) only if demand across the regions being aggregated is not perfectly positively correlated.
• C) even if demand across the regions being aggregated is not perfectly positively correlated.
• D) whenever demand across the regions being aggregated is not perfectly positively correlated.

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Definitions:

Colored Merchants Association

An early 20th-century organization founded by African Americans to support and promote black-owned businesses against racial discrimination.

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Citizens' League

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A political party in the United States that advocates for the principles of communism, focusing on workers' rights and the establishment of a classless society.