The information conveyed by changes in market prices is especially important in financial markets because
a. It forces individual investors to reveal their information about the prospects of a security
b. It assesses business decisions
c. It helps firms forecast the future demand for products
d. All of the above
d
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A key assumption of new growth theory is that
A) all technological change is the result of luck. B) higher incomes lead to a higher birth rate. C) a successful innovator has the opportunity to earn a temporary, above-average profit. D) the population growth rate is lower than the real interest rate.
Gordon believes that the new Keynesian approach as opposed to other business cycle theories is preferred because
A) it explains information barriers and sticky wages. B) it explains how workers are "fooled." C) it explains wage and price stickiness assuming rational firms and workers. D) it identifies the source of supply side shocks and slow SAS adjustment.
Implicit costs are the
a. opportunity costs of using resources owned by the entrepreneur in his/her own business b. payments the business owner must make on borrowed funds c. costs which vary as the level of output varies d. payments the business owner makes in cash e. payments the business owner makes for public relations, such as donations to charity
When an economy's government goes from running a budget deficit to running a budget surplus, the economy's long-run growth prospects are improved
a. True b. False Indicate whether the statement is true or false