In a one-period valuation model, a decrease in the required return on investments in equity causes a(n) ________ in the ________ price of a stock
A) increase; current
B) increase; expected sales
C) decrease; current
D) decrease; expected sales
A
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Starbucks sells coffee in both New York City and in rural upstate New York. The price of coffee is higher in New York City
This fact means that the value of marginal product of land is ________ in New York City and so Starbucks is willing to pay a ________ rent in New York City. A) lower; lower B) higher; lower C) lower; higher D) higher; higher
Real business cycle proponents argue that
a. recessions are caused by movements of output away from the natural rate of output. b. prices and wages are sticky. c. macroeconomics should be based on the same assumptions as microeconomics. d. monetary policy is important in determining recessions. e. none of the above.
The substitution effect can be defined as:
A. the change in consumption that results from a change in the relative price of goods. B. the change in consumption that results from increased effective wealth due to lower prices. C. the change in consumption that results from increased effective wealth due to getting a raise. D. the change in income that results from increased effective consumption due to lower prices
Which of the following is an example of an injection into the circular flow of income and expenditure?
a. Government spending b. Imports c. Disposable income d. Net taxes e. Saving