Assume There Are Only Three Possible States of Nature for the Economy

question 57

Multiple Choice

Assume there are only three possible states of nature for the economy in the future: boom,normal,and recession.If there is a 25% chance of a recession and a 30% chance of a boom,then what is the probability of a normal economy in the future?

• A) 45%
• B) 30%
• C) 25%
• D) 100%

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Definitions:

Isolated

Being separated from others, either physically or socially, resulting in a lack of contact or interaction.

Demographic Bottleneck

A sharp reduction in the size of a population due to environmental events or human activities, leading to a decrease in genetic diversity and potential survival challenges for the population.

Genetic Drift

A mechanism of evolution that involves random fluctuations in the frequencies of alleles (variations of a gene) in a population, particularly in small populations.