Answer:
The difference between the return on an index fund and the return on Treasury bills
Explanation:
The market risk premium explains critically the difference between an expected return on a given market portfolio and the risk-free rate.
It is also the additional return a given investor will receive (or is expected to gain) from holding a risky market portfolio instead of risk-free assets.
Answer:
The correct answer is letter "B": potentially useful in forming economic policy.
Explanation:
Economic models are abstractions that try to simplify phenomena of the real world. Economic models are the assumption that economists make to understand the diverse economic events that occur. Those models could be theoretical or mathematical in some cases.
<em>Economic models can help governments establish economic policies based on facts of the environment and the variables affecting that community.</em>
Answer:
b. On the production possibility frontier.
Explanation:
The production possibility frontier is a curve showing various combinations of the maximum production volumes of several goods (goods or services) that can be created under conditions of full employment using all resources available in the economy. Different release combinations reflect different uses of limited resources. For example, labor can be used in the production of various goods. The use of a unit of labor in the production of one good leads to the impossibility of its use in the production of any other good. Therefore, an increase in output in one sector of the economy leads to opportunity costs in the form of a decrease in output in another sector. In different sectors of the economy, resources can be used with different efficiency, therefore, the curve of production opportunities reflects a complex nonlinear relationship between different combinations of output. The intensity of resource use depends on the presence of other factors of production. For example, labor productivity depends on the availability of capital, as well as on the level of technology. The issue is also influenced by the law of diminishing marginal returns: with an increase in a resource and an unchanged number of other resources, the marginal return will decrease. The production capability curve is part of the optimal resource allocation task.
In autarky, when there happens the utility maximization the consumption point which is also equilibrium condition case, will be on the production possibility frontier. Because the consumption point will satisfy the problem and be the solution to make the equilibrium.
Increased, decreased or remained the same.
