The Securities and Exchange Commission of the U.S. government requires that mutual fund companies publish a long and detailed prospectus which covers an array of areas including the cost of owning the fund, the types of stocks the fund invests in,
the management fee, administrative fees and an assessment of the type of risk that holding the fund represents. This is clearly designed with the intent of mitigating the imperfect information problem. However, can you think of any reason why the value of these documents is likely to be quite marginal?
First of all, just because they require mutual funds to publish a prospectus is no guarantee that investors will actually read it. Second, even if they do read it investors may not understand much of the material given that many people may lack personal finance knowledge.
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Sonia was a great bookkeeper 20 years ago, then left the workforce to stay home and raise her children. Now that they're in college, Sonia looks for another bookkeeping job, but they all require computer skills that she doesn't have. Sonia would be considered:
A. frictionally unemployed. B. structurally unemployed. C. Sonia is not in the labor force.. D. seasonally unemployed.
The ordering of market structures from most market power to least market power (where market power is the ability to set its own price) is:
a. monopoly, monopolistic competition, oligopoly, perfect competition. b. perfect competition, monopolistic competition, oligopoly, monopoly. c. oligopoly, monopoly, monopolistic competition, perfect competition. d. monopoly, oligopoly, monopolistic competition, perfect competition. e. monopoly, perfect competition, monopolistic competition, oligopoly.
Models are simplifications that are used to observe the workings of a system
a. True b. False Indicate whether the statement is true or false
Tuition and fees for four year colleges in the United States have risen over five percent per year recently. One cause for the increase in price has been an increase in demand for college education. In the standard model, what could be a possible explanation for the increase in the demand for college education?
A. Income in the United States has risen B. The cost of two-year colleges has declined over the same period C. More colleges have been established D. The price of all other goods in the economy has risen 3 percent over the same period