Author Question: George is considering buying shares of Intel. If the company does well, he will gain 100, but if the ... (Read 55 times)

Alainaaa8 · **on:** Jun 29, 2018

George is considering buying shares of Intel. If the company does well, he will gain 100, but if the company does poorly, he will lose 100.

George is risk averse, so for George the magnitude of the pain of losing 100 will ________ the pleasure of gaining 100. A) equal
B) be less than
C) be greater than
D) None of the above answers are correct because we cannot compare the pain of losing to the pleasure of gaining.

Question 2

Which of the following is TRUE regarding the quantity theory of money?

I. The theory predicts that in the long run the inflation rate equals the money growth rate minus the growth rate of real GDP.
II. The theory predicts that countries with high growth rates of money will have high inflation rates.
III. The theory predicts that increases in the growth rate of velocity lowers the inflation rate.
A) I and II
B) II and III
C) I and III
D) I, II and III