Economists Use the Term Inflation to Describe a Situation in Which

question 11

Multiple Choice

Economists use the term inflation to describe a situation in which

• A)some prices are rising faster than others.
• B)the economy's overall price level is rising.
• C)the economy's overall price level is high,but not necessarily rising.
• D)the economy's overall output of goods and services is rising faster than the economy's overall price level.

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Definitions:

Firm-specific Risk

Risk associated with an individual company, as opposed to the market as a whole.

Efficient Frontier

A graphical representation in portfolio management that shows the best possible investment portfolios that offer the highest expected return for a given level of risk.

Risky Assets

Assets that have a higher degree of uncertainty in their returns, often with the potential for higher gains but also higher losses.

Minimum-variance Portfolio

An investment portfolio designed to have the lowest possible risk (variance) for its expected return.