By external balance, most economists mean
A) avoiding excessive imbalances in international payments.
B) balance between exports and imports.
C) balance between the trade and service accounts.
D) what amounts to fixed exchange rates.
E) imbalance in internal transactions.
A
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What is meant by a speculative bubble?
a. A pattern in past stock prices that, according to technical analysts, indicates higher future prices. b. A circumstance where everyone expects higher prices, which in turn causes higher prices. c. An occasional occurrence in program trading in which many investors simultaneously receive instructions to sell. d. A situation where poorly informed traders exacerbate any upturns or downturns in the market.
Members of the Federal Reserve Board of Governors are
A. appointed by Congress to staggered 14-year terms. B. selected by each of the Federal Reserve banks for 4-year terms. C. selected by the Federal Open Market Committee for 4-year terms. D. appointed by the president to staggered 14-year terms.
An expansionary monetary policy in the United States should
A) cause the dollar to appreciate. B) decrease the foreign currency price of U.S. exports. C) decrease net exports. D) decrease the dollar price of imports.
Mean reversion refers to the tendency for
A) futures prices to revert to the prices of the underlying securities. B) the long-run mean return on stocks to equal the long-run mean return on bonds. C) stocks with high returns today to experience low returns in the future and for stocks with low returns today to experience high returns in the future. D) financial analysts whose stock picks have earned above-normal returns in the past to be unable to pick stocks that will perform as well in the future.