Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets, and therefore choose to invest in foreign markets. By using
all available information as they act to achieve their goals, these investors are exemplifying the economic idea that
A) people are rational.
B) people respond to economic incentives.
C) optimal decisions are made at the margin.
D) equity is more important than efficiency.
Answer: A
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If this year the price level is 135 and last year it was 125, the inflation rate is
A) 8 percent. B) 10 percent. C) 12 percent. D) none of the above.
Under a perfectly price discriminating monopolist, each consumer consumes ________ a perfectly competitive market.
A. the same amount of output as they would under a non-discriminating monopolist as well as B. less output than they would under an imperfectly price discriminating monopolist, but more than under C. more output than they would under an imperfectly price discriminating monopolist, but less than under D. the same amount of output as they would under
The demand for loanable funds comes from:
A. investment. B. savings. C. the government printing money. D. households spending on nondurable goods.
In the short run,
a. spending depends on income and income depends on spending b. spending depends on income, but income does not depend on spending c. income depends on spending, but spending does not depend on income d. spending and income are independent of one another e. spending is the only determinant of how much income an economy will produce