Securities markets perform a valuable economic function because they provide
A. an opportunity for investors to make money in a short time.
B. the principal indicator of the performance of the U.S. economy.
C. an easy way to transfer corporate securities, thereby reducing risk to investors.
D. assurance that stock purchasers can get back the purchase price of their stock.
Answer: C
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Financial intermediaries increase the probability of a risky venture being funded by concentrating the risk among a few investors.
Answer the following statement true (T) or false (F)
When consumers in a market become fully informed of negative information about the product, we can expect the
A. price of the product to decrease. B. price of the product to increase. C. price of the product to remain constant but the equilibrium quantity to decrease. D. equilibrium quantity of the product to increase.
The idea that consumers determine what is produced in the economy through their demands is known as
A. consumer sovereignty. B. free enterprise. C. a laissez-faire economy. D. a command economy.
Refer to the graph above which shows the supply and demand for money where Dm1, Dm2, and Dm3 represent different demands for money and Sm1, Sm2, and Sm3 represent different levels of the money supply. The initial equilibrium point is A. What will be the new equilibrium point following an autonomous increase in the asset demand for money?
A. C
B. D
C. G
D. I