In the mainstream view, one major source of instability in the macro economy is the volatility of <u>investment spending.</u>
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The definition of instability is a lack of stability or balance or a tendency toward unpredictable or erratic behavior. When you swing from one emotion to another, first feeling happy and then very sad for no reason, this is an example of emotional instability. Lack of stability; unstableness. lack of stability or steadiness. tendency to variable or unpredictable behavior. physics is a fast-growing disturbance or wave in a plasma.
Instability is the quality of being unstable. ...unpopular policies, which resulted in social discontent and political instability.
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Your answer should be: "There is not enough information to answer." Hope I helped! :)
        
             
        
        
        
Answer:
Quantity demanded for balloons will increase.
Explanation:
According to the law of demand, there is an inverse relationship between the price of the commodity and the quantity demanded for that commodity. 
This means that if there is an increase in the price of a good then as a result the quantity demanded for that good decreases and on the other hand if there is a fall in the price of a good then as a result the quantity demanded for that good increases.
Therefore,
Fall in the price of balloons will lead to increase the quantity demanded for balloons. 
 
        
             
        
        
        
Expected return of the stock is greater than 12%.
Using formula, Risk free rate + beta (market risk rate - risk free rate)\
= 2% + 2.0 (7%-2%)
= 13.6 - 0.4* risk premium
Risk premium of a stock is greater than 12%.
A stock's total return takes into account both capital gains and losses as well as dividend income, as opposed to a stock's nominal return, which only displays its price movement. In addition to considering the actual rate of return, investors should consider their ability to withstand the risk involved with a given investment. An investment's return on investment (ROI) provides a general indication of its profitability. The return on investment (ROI) is calculated by subtracting the investment's initial cost from its final value, dividing the result by the cost of the investment, and finally multiplying the result by 100.
Note that the full question is:
If the market risk premium is 7%, the risk-free rate is 2% and the beta of a stock is 2.0, what is the expected return of the stock?
A. less than 12%.
B. 12%.
C. greater than 12%.
D. cannot be determined.
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