“An investment’s rate of return is inversely related to its price.” Explain.
What will be an ideal response?
The higher an investment’s price, the more that price infringes on the asset’s rate of return. For example, suppose an asset has an initial price of $400 and gains $50 one year later. The asset earns a rate of return of 12.5% (50/400). Now suppose the asset price rises to $500 and still gains $50 one year later. The rate of return has been reduced to 10% (50/500). When the level of earnings is fixed, the higher the price, the lower the rate of return.
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The health care system in the United States is referred to as ________, a system where private doctors and hospitals provide almost all health care services
A) a single-payer system B) a universal health insurance system C) socialized medicine D) a private health care system
Assuming a simultaneous reduction in income taxes and transfer payments of $50 billion, then aggregate disposable income will
a. be higher than before. b. be lower than before. c. remain constant. d. None of the above