The risk premium is
A) the amount by which the expected return on a risky asset exceeds the return on an otherwise comparable safe asset.
B) a measure of the riskiness of the overall economy in a domestic country compared with a foreign country.
C) the amount an investor must pay to insure his or her stock portfolio to protect against a fall in value.
D) the amount an investment bank charges to guarantee an annuity that pays a fixed rate of return in the future.
A
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In the Keynesian DMP model
A) There is a fiscal multiplier. B) The government post vacancies in the labor market. C) There is no unemployment. D) There can be more than one wage consistent with equilibrium.
Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:
a. the demand for new homes has risen. b. the law of demand has been violated. c. new firms have entered the construction industry. d. construction firms must be facing higher costs.