Refer to the Above Graph

question 41

Multiple Choice

Refer to the above graph. If the production possibilities curve for an economy is at CD but the economy is operating at point X, the reasons are most likely to be because of:

• A) Technological progress and industrial change
• B) Increases in the quantity and the quality of resources
• C) Improvement in labor productivity and the number of work-hours
• D) Unemployment and inefficient allocation of resources

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Definitions:

Rate of Return

The positive or negative change in an investment's worth, calculated as a percentage of its original cost.

Correlation Coefficient

A numerical measure of the linear correlation between two variables, ranging from -1 to 1.

Riskless Portfolio

A theorized portfolio of investments that has a guaranteed return, with no risk of financial loss.

Risky Stocks

Shares in companies with high volatility and potential for substantial gains or losses.