Refer to the above figure. Suppose the U.S. economy is currently operating at point C. Which of the following actions would you recommend to the president of the United States?
A) Engage in contractionary fiscal policy by reducing government spending.
B) Reduce taxes to stimulate investment, consumption and net exports.
C) Increase government spending while holding taxes constant.
D) Reduce the interest rate to stimulate investment minimizing the crowding out effect.
A
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Suppose the total monetary value of all final goods and services produced in a particular country during one year is $500 billion, and the total monetary value of final goods and services sold is $450 billion. We can conclude that ________.
A. real GDP in 2010 is $450 billion B. inventories in 2010 fell by $50 billion C. nominal GDP in 2010 is $450 billion D. nominal GDP in 2010 is $500 billion
Is the following quote correct? "Here's the law of demand in a nutshell: The higher the price, the lower the demand."
A) Yes, it is totally correct. B) No. It would be correct if it were to also say "other things constant." C) No, because it confuses demand and quantity demanded. D) No, because the law of demand does not apply to nutshells.
In a competition of financial analysts vs. throwing a dart to choose stocks, according Burton Malkiel, financial analysts came out ahead due to all of the following reasons EXCEPT:
A) it considered only stock prices, not dividends B) investors that followed the contest were influenced to purchase the stocks recommended by the analysts C) failure of the Efficient Markets Hypothesis D) part of the return for the analysts resulted from compensation for the higher risk of the stocks chosen
The impact from rapid dividend growth on a stock's current price will be:Ptoday = 
A. negative, since the company is paying out profits to stockholders. B. positive since rapid dividend growth causes stockholders to expect higher future dividends. C. positive, but only if the corporation does not have any debt. D. zero; only current dividends are used to determine the current price of a stock.