Why does the Dow Jones Industrial Average have a value over 15,000 when the 30 stocks that make up the index all have values less than $200 per share?
What will be an ideal response?
The DJIA accounts for stock splits over the years, which are reflected in the average but not in the current price of the stock, and the companies included in the index change periodically.
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The Law of Increasing Cost is based upon which of the following?
A. If units of a resource are added to a fixed proportion of other resources, eventually marginal output will decline. B. Economies of scale eventually outweigh diseconomies of scale. C. Resources become more suitable for use in the production process as the output of one good expands. D. All of the choices are true.
Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount. As a result, the price of candy ________ and the quantity of candy ________
A) rises; does not change B) falls; increases C) does not change; increases D) does not change; does not change E) rises; increases
The "solvency condition" states that the debt-GDP ratio will rise continuously so long as
A) the real GDP growth rate exceeds the real interest rate. B) the real interest rate exceeds the real GDP growth rate. C) the real interest rate exceeds the nominal interest rate. D) the nominal interest rate exceeds the cost of borrowing.
If firms in a competitive market are NOT identical, then the long-run market supply curve will be
A) horizontal. B) upward sloping. C) downward sloping. D) undetermined.