Which of the Following Factors Had Helped Maintain the Large

question 92

Multiple Choice

Which of the following factors had helped maintain the large U.S. trade deficits over the years?

• A) A decline in investment
• B) Capital and financial account surpluses
• C) A decrease in economic growth
• D) An increase in U.S. net exports

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Definitions:

Countercyclical Beta

Countercyclical beta refers to the measure of an asset’s return sensitivity in opposition to market trends, often gaining value in downturns.

Fama-French Three-factor Model

An asset pricing model that expands on the capital asset pricing model by including size risk and value risk factors in addition to market risk.

CCAPM

Consumption Capital Asset Pricing Model; it extends the Capital Asset Pricing Model by considering the consumption habits of investors to explain asset prices.

Traditional CAPM

The Capital Asset Pricing Model, a framework used to determine the expected return on an investment, factoring in risk-free rate, the asset's beta, and the market risk premium.