What is meant by a speculative bubble?
a. A pattern in past stock prices that, according to technical analysts, indicates higher future prices.
b. A circumstance where everyone expects higher prices, which in turn causes higher prices.
c. An occasional occurrence in program trading in which many investors simultaneously receive instructions to sell.
d. A situation where poorly informed traders exacerbate any upturns or downturns in the market.
b. A circumstance where everyone expects higher prices, which in turn causes higher prices.
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In a typical production function, the relevant factors of production are land, labor, capital, and
A. resources. B. raw materials. C. technology. D. entrepreneurship.
The effects of a decrease in export demand
A) is a powerful argument in favor of fixed rates. B) is a powerful argument in favor of flexible rates. C) shows the difficulties in determining which exchange rate is better. D) is a powerful argument in favor of fixed rates only in the short run. E) is a powerful argument in favor of fixed rates only in the long run.
Define the term adverse selection. Why is an insurance company unable to offer fair odds when it faces an adverse selection problem? How might the insurance company deal with an adverse selection problem?
What will be an ideal response?
When determining whether to shut down in the short run, a competitive firm should ignore (i) fixed costs. (ii) variable costs. (iii) sunk costs
a. (iii) only b. (i) and (iii) only c. (ii) only d. (i), (ii), and (iii)