The Classical Macroeconomic Model Proposes That

question 73

Multiple Choice

The Classical macroeconomic model proposes that

• A)government intervention is required to help the economy reach its potential.
• B)real GDP equals potential GDP as long as inflation equals zero.
• C)changes in the quantity of money are critical in driving economic growth.
• D)markets work efficiently to produce the best macroeconomic outcomes.
• E)socialism produces the most efficient economic outcomes for a society.

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Definitions:

Equities

Shares of ownership in a company, representing a claim on part of the company's assets and earnings.

Contingent Immunization

A mixed passive-active strategy that immunizes a portfolio if necessary to guarantee a minimum acceptable return but otherwise allows active management.

Risk Tolerance

An investor's ability or willingness to endure market volatility and potential loss in the value of investments.

Life Cycle

The series of stages through which a product or project passes, from initial concept through growth, maturity, and eventual decline.