Stock market crashes lead us to believe that
A) factors other than market fundamentals have an effect on asset prices.
B) unexploited profit opportunities never exist.
C) crashes are always predictable when market participants behave rationally.
D) bubbles are a natural outcome of an efficient market.
A
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What does the phrase "internalizing an external cost" mean?
A) forcing producers to factor into their production costs the cost of the externalities created in the production of their output B) finding a way to address cross-border pollution C) limiting the extent to which domestic firms can outsource production D) prohibiting economic activities that create externalities
Which of the following is a financial intermediary?
a. a mutual fund b. the stock market c. a U.S. government bond d. a wealthy individual who regularly buys and holds large quantities of government bonds
Economies of scale refer to:
A. the idea that proprietorships are less bureaucratic and therefore more efficient than corporations. B. public investments in highways, schools, utilities, and such. C. the fact that large producers may be able to use more efficient technologies than smaller producers. D. the reallocation of labor from less-productive to more-productive uses.
Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries with a "Buy Canadian" provision. This policy, similar to the original "Buy American" provision in the 2009
U.S. stimulus bill, is likely to cause A) exporting countries to retaliate by placing trade barriers on their imports from Canada. B) Canadian manufacturers to become more efficient. C) Canadian companies to pay lower prices for protected products. D) most countries to reduce their own trade barriers to be able to better compete with Canadian imports at home.