Question 6

The following figure shows Bobby's indifference map for soda and juice. B1 indicates his original budget line. B2 indicates his budget line resulting from a decrease in the price of soda. What change in quantity best represents his income effect?
  • Question 7

    Whenever a hedge fund is added to the database, its historical data is also posted to the database.
    Usually, only favorable results of the fund are published in the database. This leads to:
  • Question 8

    Of the following statements:
    I). In a normal distribution, the coefficient of skewness is 1.0.
    II). In normal distribution, approximately 95% of the observations lie within one standard deviation of its mean.
  • Question 9

    Which statement(s) is/are FALSE?
    I). Under the LIFO method of inventory valuation, the ending merchandise inventory would be valued at the purchase price of the most recent purchases.
    II). During extended periods of rising prices, the FIFO method of inventory valuation will yield a higher cost of goods sold and a lower ending merchandise inventory, when compared to the LIFO method of inventory valuation.
    III). The accounting principle of consistency prohibits any changes in the method of inventory valuation.
    IV). JIT means just in time and is an inventory method where the raw materials for production are purchased in smaller quantities after orders have been taken for the manufactured products.
  • Question 10

    An appreciation of the US dollar would ____ (increase, decrease, not affect) aggregate demand, and an increase in the real interest rate would ____ (increase, decrease, not affect) aggregate demand.