A "risky" asset will earn a rate of return close to that of "riskless" assets if its risk is

At a Mufflers-R-Us repair shop customers have the opportunity to wait in a room with chairs, a television, magazines, coffee and donuts. The economic way of thinking suggests the muffler shop is

A) selling mufflers below cost. B) selling the additional goods and services below cost. C) attempting to increase its total profit D) engaging in unfair trade practice because it provides the goods and services free of charge. E) almost certainly doing none of the above.

All of the following would be potential problems if developing nations around the world emphasized export promotion EXCEPT

A) industrial nations may be unable to absorb the exports of many newly industrializing nations. B) it would be much harder to emphasize exports under the WTO framework if the emphasis in exports requires some kind of subsidies. C) export growth may not add to GDP if it crowds out growth in output of goods for domestic consumption. D) export promotion by many countries may lead to economic conflicts. E) current research has clearly established that there is no causal connection between exports and faster economic growth.