What Do Economists Illustrate When They Use the Phrase "There

question 170

Multiple Choice

What do economists illustrate when they use the phrase "There is no such thing as a free lunch"?

• A)how inflation increases prices
• B)that to get one thing, we must give up something else
• C)that nothing is free in a market economy
• D)that if something looks too good to be true, it probably is

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Definitions:

Expected Return

The anticipated average return on an investment under normal conditions, taking into account both the probability of each outcome and the return of each outcome.

Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs.

Covariance

A measure used in statistics to determine how two variables move together, indicating the degree to which they are correlated.

Currency Strengthens

Occurs when the value of a currency rises in comparison to one or more foreign currencies, increasing purchasing power abroad.