Assuming that C + Ir + G < C + I + G, then
a. there is an unintended inventory accumulation.
b. there is an unintended inventory shortfall.
c. aggregate demand is less than output.
d. Both b and c
D
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Variable tolls on roads
a. are politically unpopular because people do not like the idea of paying for a good that they used to consume without paying for it directly. b. rise when traffic volume increases to ensure the speed on the road is kept high. c. are an effective way of correcting the common resource problem on roads. d. All of the above are correct.
If an asset has a risk-return combination that is above the Security Market Line (SML), then arbitrage will make that asset's:
A. Beta increase B. Beta decrease C. Average expected return increase D. Average expected return decrease