Nominal GDP Can Change

question 189

Multiple Choice

Nominal GDP can change

• A)only if prices change.
• B)only if the quantities of goods and services change.
• C)only if prices increase.
• D)if either prices or the quantities of goods and services change.
• E)only if prices and the quantities of the goods and services change.

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Definitions:

Risk-Free Rate

The return on an investment with zero risk, typically associated with government bonds.

Market Risk Premium

The Market Risk Premium is the additional return an investor expects from holding a risky market portfolio instead of risk-free assets.

Beta

Beta measures the volatility of an investment relative to the market as a whole, indicating how much an investment's price is likely to move in relation to market changes.

Risk-Free Rate

The Risk-Free Rate is the theoretical rate of return on an investment with zero risk, typically represented by the yield on government securities like U.S. Treasury bills.