States That Are Required by Their Constitution to Have Annually

question 52

Multiple Choice

States that are required by their constitution to have annually balanced budgets are likely to _____ than those not required to balance their budget.

• A)have less severe business cycles
• B)have more severe business cycles
• C)grow faster
• D)have a better quality of life

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Definitions:

Expected Return

The weighted average of all possible returns for an investment, with each return being weighted by its probability of occurrence.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Opportunity Sets

The range of possible investment opportunities available to an investor, given their resources and risk tolerance.

Risk-free Rate of Return

The theoretical rate of return of an investment with zero risk, typically represented by government bonds.