Sample questions for midterm

All else equal if there are diminishing returns then

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All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year, A. the increase in output was greater for this year than last year. B. the increase in output was greater last year than this year. C. the increase in output is the same in both years. D. None of the above is necessarily correct. Suppose that an American opens and operates a candy factory in Finland. This is an example of A. foreign portfolio investment. American saving is used to finance American investment. B. foreign portfolio investment. American saving is used to finance Finish investment. C. foreign direct investment. American saving is used to finance American investment. D. foreign direct investment. American saving is used to finance Finish investment. The primary advantage of mutual funds is that they A. always provide the highest return. B. allow people to diversify, which increases risk and return. C. always allow people to "beat the market." D. allow people to diversify and reduce risk.
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