Investors should be willing to pay more for a stock when (controlling for all other things):
a. Future interest rates are expected to increase.
b. Future interest rates are expected to decrease.
c. Future dividends are expected to decrease.
b. Future interest rates are expected to decrease.
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Increases in resources or improvements in technology will cause the production possibilities frontier to
a. shift outward b. shift inward c. become a straight line d. become horizontal e. become vertical
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
Which of the following would increase the level of planned real investment?
A. an expectation of higher future costs B. an expectation of higher future profits C. an increase in the interest rate D. an increase in business taxes
Given a required reserve ratio of 20 percent, a commercial bank that has received a new deposit of $1000 can make additional loans of
A. $1000. B. $200. C. $0. D. $800.