The theory of efficient markets implies:
A. expectations do not play a role in stock prices because this isn't real information.
B. the price at which stocks currently trade only reflect past information.
C. the chartists are in fact correct that there are patterns in stock prices.
D. stock prices should be highly unpredictable.
Answer: D
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If marginal cost exceeds average total cost in the short run, then which is likely to be true?
A. Marginal cost is less than average variable cost. B. Average total cost is less than average variable cost. C. Average total cost is increasing. D. Average variable cost is decreasing.
Real business cycle models argue that fluctuations in real GDP are caused by unanticipated changes in the money supply
Indicate whether the statement is true or false
Suppose that for a given good demand decreases and supply increases at the same time. If demand decreases by a greater amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good
A) rises; rises B) rises; falls C) falls; rises D) falls; falls
Suppose you win a small lottery and you are given the following choice: You can receive (1) an immediate payment of $5,000 or (2) two annual payments, each in the amount of $2,700, with the first payment coming one year from now, and the second payment coming two years from now. You would choose to take the two annual payments if the interest rate is
a. 2 percent, but not if the interest rate is 3 percent. b. 3 percent, but not if the interest rate is 4 percent. c. 4 percent, but not if the interest rate is 5 percent. d. 5 percent, but not if the interest rate is 6 percent.