61) Refer to Table 2-2. Assume that 2008 is used as the base year, with the index number = 100.  The value of the index number in 2011 is calculated as follows: A) 0.35 × 100 = 35 B) 0.35/0.55 = 0.64 C) 0.55/0.35 = 1.57 D) (0.35/0.55) × 100 = 63.64 E) (0.55/0.35) × 100 = 157.14 62) Refer to Table 2-2. Assume […]

    9.2   Comparative Advantage in International Trade   1) Absolute advantage is A) the ability to produce more of a good or service than competitors when using the same amount of resources. B) the ability to produce higher quality goods compared to one’s competitors. C) the ability to produce a good or service at a higher opportunity cost than one’s competitors. D) the ability […]

    41.A controlling interest in another company: a.exists whenever the relationship between the investor and investee gives the investor significant influence. b.requires the parent to prepare consolidated financial statements. c.is evidence that a merger will soon occur. d.can be as low as 20 percent.       42.Why might chief executives react very positively to current goodwill accounting? a.Goodwill increases in value. b.Goodwill is […]

    51) Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole. The public choice model suggests that Flack’s vote is best explained by which of the following? A) rational ignorance B) party loyalty C) logrolling D) the voting paradox     52) Many economists believe that when the federal government establishes an agency to regulate a particular industry, the […]

  71.ShawndeterminesthatifLexallCorporationhashighrevenues,thenWatersCorporationwillhavelowrevenues,andthatifLexallCorporationhaslowrevenues,thenWatersCorporationwillhavehighrevenues.Shawnbuysstockinbothcorporations. a.Hehasreducedfirm-specificriskbutnotmarketrisk. b.Hehasreducedmarketrisk,butnotfirm-specificrisk. c.Hehadreducebothfirm-specificriskandmarketrisk. d.Hehasreducedneitherfirm-specificrisknormarketrisk. 72.Amandatalkswithseveraldifferentbrokersatasocialgathering.ShehearsthefollowingadvicefrombrokersA,B,andC.Whichbroker,ifany,gaveherincorrectadvice? a.BrokerA:“Therearerisksinholdingstocks,eveninahighlydiversifiedportfolio.” b.BrokerB:“Portfolioswithsmallerstandarddeviationshavelowerrisk.” c.BrokerC:“Stockswithgreaterrisksofferloweraveragereturns.” d.Theyallgavehercorrectadvice. 73.Chloetalkedtoseveralstockbrokersandmadethefollowingconclusions.Which,ifany,ofChloe’sconclusionsare a.Itisrelativelyeasytoreducefirm-specificriskbyincreasingthenumberofcompaniesoneholdsstockin. b.Stockprices,evenifnotexactlyarandomwalk,areveryclosetoit. c.Somepeoplehavemadealotofmoneyinthestockmarketbyusinginsiderinformation,butthesecasesarenotcontrarytotheefficientmarketshypothesis. d.AllofChloe’sconclusionsarecorrect. 74.Otherthingsthesame,asthenumberofstocksinaportfoliorises, a.riskincreasesandthestandarddeviationofthereturnrises. b.riskincreasesandthestandarddeviationofthereturnfalls. c.riskdecreasesandthestandarddeviationofthereturnrises. d.riskdecreasesandthestandarddeviationofthereturnfalls. 75.Otherthingsthesame,asthestocksofagreaternumberofcorporationsareheldinaportfolio, a.riskincreasesatanincreasingrate. b.riskincreasesatadecreasingrate. c.riskdecreasesatanincreasingrate. d.riskdecreasesatadecreasingrate. Figure27-6.Onthegraph,xrepresentsriskandyrepresentsreturn.   76.RefertoFigure27-6.PointArepresentsasituationinwhich a.allofaperson’ssavingsareallocatedtoaclassofsafeassets. b.thepersonknowswithcertaintythathisorherreturnwillbe3percent. c.thestandarddeviationoftheperson’sportfolioiszero. d.Alloftheabovearecorrect. 77.RefertoFigure27-6.Whichofthefollowingstatementsiscorrect? a.AtpointAthestandarddeviationoftheportfoliois3. b.AriskaversepersonalwayswillchoosetobeatpointA. c.AtpointDtheportfolioconsistsofabout15percentstocksand85percentsafeassets. d.Thefigureshowsthatthegreatertherisk,thegreaterthereturn. 78.Diversificationreduces a.onlymarketrisk. b.onlyfirm-specificrisk. c.neithermarketorfirm-specificrisk. d.bothmarketandfirm-specificrisk. 79.Whichofthefollowingisasourceofmarketrisk? a.Holdingstocksinmanycompaniescarriestheriskofareducedaveragereturn. b.RealGDPvariesovertimeandsalesandprofitsmovewithrealGDP. c.Whenapaperproducerhasdecliningsales,itislikelythatsowillotherpaperproducers. d.IfstockholdersbecomeaggravatedwiththewayaCEOrunsacompany,thepriceofthatcompany’sstock 80.Therearemanyconcernsforrisk-averselenders.Considerthefollowing:1.Lendersareconcernedthatborrowerswiththegreatestriskaretheonesmostlikelytoactivelypursueloans.2.LendersareconcernedthatrealGDPwilldeclineleadingtoreducedcorporateprofits.3.Lendersareconcernedthatproductsproducedbycertaincorporationswillbecomeobsolete. a.1ismarketrisk;2isfirm-specificrisk b.2ismarketrisk;3isfirm-specificrisk c.3ismarketrisk;1isfirm-specificrisk d.2isfirm-specificrisk;3ismarketrisk    

  11) Nigeria would be classified by the International Monetary Fund as A) an advanced economy. B) a developing economy. C) a transition economy. D) an emerging market economy. E) a resource-based economy. 12) ________ economies include ______________. A) Developing; Saudi Arabia and South Africa B) Developing; Poland and Russia C) Developing; China and Poland D) Emerging; Poland and Brazil E) Emerging; China and Canada […]

    21) Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output? A) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase. B) The quantity supplied would increase, the quantity […]

  Table 17-4   Quantity of  Labor Output MPL Price Total Revenue MRPL Wage 0   0 — $200 $0 — $500 1   6 6   180       500 2 11 5   160       500 3 15 4   140       500 4 18 3   120       500 5 20 2   100   […]

    51. Which of the following statements regarding ROI computations is true? A. Net income after interest and taxes is most frequently used as the measure of income in the ROI formula.B. The fair market value of assets without regard to depreciation is used as a measure of operating assets in the ROI formula.C. Assets used in the ROI formula are generally measured as an average of beginning and […]

    21) In the United States during the Great Depression, tariffs were ________ than they were following World War II, and ________ than they are today. A) higher; higher B) higher; lower C) lower; higher D) lower; lower   22) The Smoot-Hawley Tariff A) lowered U.S. tariffs by 50 percent following World War II. B) was passed by the U.S. Congress following the Civil […]