Suppose That in 2016,all Prices in the Economy Double and That

question 175

Multiple Choice

Suppose that in 2016,all prices in the economy double and that all wages and salaries also double.In 2016 you

• A)are worse off than you were in 2015 as you can no longer afford to buy as many goods and services.
• B)are better off than you were in 2015 as your salary is higher than it was in 2015 and you can now buy more goods and services.
• C)are no better off or worse off than you were in 2015 as the purchasing power of your salary has remained the same.
• D)cannot determine whether you are better off or worse off than you were in 2015,because the purchasing power of your salary cannot be determined.

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Definitions:

No-load Mutual Fund

A mutual fund that does not charge any type of sales load or commission, allowing investors to put more of their money directly into investments.

Expense Ratio

The annual fee that mutual funds, index funds, and ETFs charge their shareholders, expressed as a percentage of the fund's average net assets.

NAV

NAV, or Net Asset Value, is the per-share value of a mutual fund or an exchange-traded fund (ETF), calculated by dividing the total value of all the securities in the portfolio, minus any liabilities, by the number of shares outstanding.

Mutual Fund

A financial instrument that pools money from various investors to invest in different types of securities, including stocks, bonds, money market instruments, and additional assets.