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Econ 312 Exam 2 exam with complete solutions 2024_2025.
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Econ 312 Exam 2 exam with complete solutions 2024_2025.
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Econ 312 Exam 2 exam with completesolutions 2024/2025
ceteris paribus - ANSWER-greek for the meaning "holing everything constant"
asset - ANSWER-any piece of property that carries value
ex:
-bonds
-stocks
-land
-houses
value in use - ANSWER-the usefulness of an asset
value in exchange - ANSWER-the price of an asset
-wealth
-expected returns
-risk
-liquidity - ANSWER-4 factors that determine the demand level for assets in
general:
wealth - ANSWER-total resources owned by an individual
increase the quantity demanded of assets - ANSWER-holding everything else
constant, an increase in wealth will..
decrease the quantity demanded of assets - ANSWER-holding everything else
constant, a decrease in wealth will..
expected returns - ANSWER-gains obtained due to holding as asset
, its expected returns relative to alternative assets increase - ANSWER-holding
everything else constant, the quantity demanded of an asset increases when..
its expected returns relative to alternative assets decrease - ANSWER-holding
everything else constant, the quantity demanded of an asset decreases when..
risk - ANSWER-the degree of uncertainty on returns
the asset has a lower risk relative to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset increases when..
the asset has a higher risk relative to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset decreases when..
liquidity - ANSWER-the ease with which an asset can be turned into cash
the asset is more liquid compared to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset increases when..
the asset is less liquid compared to alternative assets - ANSWER-holding
everything else constant, the quantity demanded of an asset decrease when..
-positively related to wealth
-positively related to expected returns relative to alternative assets
-negatively related to risk relative to alternative assets
-positively related to liquidity relative to alternative assets - ANSWER-the Theory
of Portfolio Choice
holding everything else constant, the quantity demanded of an asset is:
market - ANSWER-dynamic interaction between the buyers (demand) and the
sellers (supply) of a specific good
-the price of a good
-the quantity of the good traded in the market - ANSWER-studying markets is very
important because it helps us understand changes in:
bond prices and interest rates - ANSWER-there is an inverse relationship
between..
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