Suppose That in Some Country the Price of Silver Increased

question 114

Multiple Choice

Suppose that in some country the price of silver increased from $30 per ounce to $31 per ounce during a time when the overall price level increased by 5 percent.During this period,the real price of silver

• A)increased.
• B)decreased.
• C)stayed the same.
• D)might have increased,decreased or stayed the same;more information is needed to be sure.

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Definitions:

Covariance

A statistical measure that indicates the extent to which two variables change together, signaling the direction of their linear relationship.

Investments

The process of distributing funds with the aim of earning returns or profits.

Positive

A term usually referring to values greater than zero, or a positive attitude or outcome in a broad sense.

Expected Value

The weighted average of all possible values of a random variable, with the weights being the probabilities of the outcomes.