If an Economy Is Allocatively Efficient,it Must Be Producing

question 40

Multiple Choice

If an economy is allocatively efficient,it must be producing

• A) beyond its production possibilities frontier.
• B) inside its production possibilities frontier.
• C) on its production possibilities frontier.
• D) the goods and services that are the most expensive.
• E) the goods and services that are the least expensive to produce.

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Definitions:

Return on Stock

The gain or loss on an investment in stock, represented as a percentage of the investment's initial cost.

Unsystematic Risk

The risk associated with a specific issuer or a particular industry sector, unlike systemic risk, which impacts the entire market.

Increasing Market

A market trend characterized by rising stock prices and generally optimistic investor sentiment, often associated with economic growth.

Global Minimum Variance Portfolio

An investment portfolio that is designed to have the lowest risk (variance) for a given rate of return, by optimizing the allocation of assets.