A Mutual Fund That Invests Almost Entirely in Common Stocks

question 87

Multiple Choice

A mutual fund that invests almost entirely in common stocks and aims for capital gains is called a(n) ____________ fund.

• A)balanced
• B)growth
• C)income
• D)equity
• E)money market

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product or service.

Long-Run Equilibrium

A state in which all factors of production are variable, allowing firms to adjust their inputs in response to market conditions, resulting in no firm having an incentive to enter or exit the market.

Allocative Efficiency

A state of resource allocation where goods and services are distributed according to consumer preferences, reflecting the highest possible welfare.

Economic Profits

Profits exceeding the opportunity costs of all resources employed, indicating above-normal returns.