For Economists, Statements About the World Are of Two Types

question 75

Multiple Choice

For economists, statements about the world are of two types:

• A) assumptions and theories.
• B) true statements and false statements.
• C) specific statements and general statements.
• D) positive statements and normative statements.

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Definitions:

Portfolio Risk

The potential for losses or lower than expected returns from an investment portfolio due to various factors like market volatility.

Interest Rate

The financial cost, expressed as a percent of the principal, that borrowers incur from lenders to use assets.

Present Value

The existing value today of a sum of money to be received in the future or continuous cash inflows, calculated at a certain rate of return.

Loanable Funds

The money available for borrowing, which includes savings that are available for investment and loans.