If a stock market is utilizing all of the available information on earnings projections, interest rates, risk, etc., economists refer to the market as
A. attentive.
B. fully engaged.
C. proper.
D. efficient.
Answer: D
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Surplus value that is lost due to taxes imposed on imported goods which are keeping the market from functioning as well as it can is called
A) the loss of subsidy. B) the net export deficit. C) rent seeking loss. D) the deadweight loss of a tariff.
In the long run, an economy will produce its potential output if: a. workers mistakenly believe that nominal wages equal real wages
b. the expectations of workers and firms are the same in the long and short run. c. wages and prices are sufficiently flexible. d. the price level is high. e. the price level is low.
Under the _____ arrangement, the exchange rate is adjusted periodically by small amounts at a fixed, pre-announced rate or in response to certain indicators
a. currency board b. crawling peg c. reserve currency d. conventional fixed peg e. independent float
Nations will be able to produce a larger joint output and realize mutual gains when each specializes in the production of those items for which it is a low-opportunity cost producer and trades for those things that it could produce only at a high cost. This statement best describes the
a. free rider problem. b. infant-industry argument. c. law of comparative advantage. d. equation of exchange.