A Recession Often Begins with A(n)________ in Spending by Firms

question 117

Multiple Choice

A recession often begins with a(n) ________ in spending by firms on capital goods and a(n) ________ in spending on durable goods by households.

• A)increase; decrease
• B)increase; increase
• C)decrease; increase
• D)decrease; decrease

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Definitions:

Minimum Risk Portfolios

Investment strategies that aim to minimize the overall risk of a portfolio through diversification and asset allocation.

Expected Returns

The anticipated profit or loss from an investment over a specific period.

High-Beta Stock

Stocks with a beta value higher than 1, indicating they are more volatile than the market as a whole.

Historical Beta

A measure of an asset's volatility in relation to the market, based on past price movements, indicating its risk compared to the market.