Two investment advisers are comparing performance. One averaged a 16% rate of return and the other a 13% rate of return. However, the beta of the first investor was 1.6, whereas that of the second investor was 1. a. Can you tell which investor was a better selector of individual stocks (aside from the issue of general movements in the market)?

1. First investor
2. Second investor
3. Cannot determine

b. If the T-bill rate was 8% and the market return during the period was 10%, which investor would be considered the superior stock selector?

1. Second investor
2. First investor
3. Cannot determine

c. What if the T-bill rate was 5% and the market return was 12%?

1. First investor
2. Second investor
3. Cannot determine

Highland company produces a lightweight backpack that is popular with college students. standard variable costs relating to a single backpack are given below

Self-interest achieve society’s economic goals because producers know which goods consumers want the most. as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost. consumers and producers both operate based on society’s economic goals. consumers know which goods can be produced at the lowest cost. there is a wide variety of desired goods and services in a market system because producers determine what to produce. consumers change their minds frequently. there is always a need to produce something new and improved. individual wants are diverse. what is produced is ultimately determined by consumers, because if the goods offered are not what consumers want, consumers will not buy them. producers, because they are driven by profits. producers, because they determine what to produce. consumers, because they participate in marketing surveys.

Crowding out is a phenomenon focused upon most by the macroeconomists of whereby a government deficit interest rates, which in turn private investment spending. this group also believed that fiscal policy is the only thing that can lower natural unemployment. is just as effective in countering recessions as monetary policy. can be used most of the time, but monetary policy becomes a better option when velocity is fluctuating. should be used only if the central bank follows a monetary policy rule. faces problematic lags in propagating changes throughout the economy.