The concept of Pareto optimality is a
A) utopian concept.
B) useful concept because it guarantees economic equality.
C) useful concept because it defines economic efficiency.
D) useful concept that carefully balances a society's desires for equality and efficiency.
C
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A stock is expected to pay a dividend of $2.50 per share indefinitely. The stock is expected to generate a return of 8 percent in the foreseeable future. Based on this information, a fair price of this stock would be
A) $25.00. B) $31.25. C) $20.00. D) Cannot be determined without additional information.
Which of the following is the most accurate statement about real and nominal interest rates?
a. Real interest rates can be either positive or negative, but nominal interest rates must be positive. b. Real interest rates and nominal interest rates must be positive. c. Real interest rates must be positive, but nominal interest rates can be either positive or negative. d. Real interest rates and nominal interest rates can be either positive or negative.
Lewis has $5,000 worth of bonds in Farrell’s Seed Company. Bonnie has 10,000 shares of preferred stock in the company, Jeff has 100,000 shares of common stock, and Val has 1 share of common stock. If Farrell’s Seed Company goes out of business, which obligation will it be required to meet first?
a. paying Bonnie the full value of her preferred stock b. paying Jeff the dividends on his common stock c. paying Lewis the full value of his bonds d. paying Val the full value for her share of common stock
Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is on the intermediate range of the aggregate supply curve, then:
A. both real GDP and the price level will fall. B. real GDP will fall and the price level will rise. C. real GDP will rise and the price level will fall. D. both real GDP and the price level will rise.