Which of the following are accurate arguments suggesting that the fiscal stimulus did work?
a. Real GDP growth moved from negative to positive in 2009.
b. Employment increased in 2009.
c. The economy has natural self-correcting mechanisms.
d. The return on bailout assets reduced the deficit.
a
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XYZ Gadget Company is currently considering which investment projects it should undertake. The following list of projects along with the estimated rate of return of each project is presented to the executive management team:Project A (9%)Project B (7.5%)Project C (6%)Project D (11%)Project E (5.5%)The current interest rate in the loanable funds market is 7%. However, the government is considering an increase in government borrowing to implement fiscal policy. How high would interest rates need to go to induce the company to drop all but one of its planned investment projects?
A. Above 9% B. Above 7% C. Above 7.5% D. Above 11%
(Last Word) In 2000, Microsoft was fined $2.7 billion for
Lily wants to invest in the stock market. She notices that the share price for Widgets Inc. has been falling for weeks. She chooses to invest in Widgets Inc. because she assumes it is due for a rebound. Lily suffers from:
A. the hot-hand fallacy. B. the gambler's fallacy. C. irrational exuberance. D. the sunk cost fallacy.
Stockholders manage risk by
A) electing the board of directors. B) appointing day-to-day managers. C) diversifying their portfolios. D) having lots of bonds in their portfolios.