If people expect future earnings of Galt Corporation to be high relative to current earnings, then
a. the P/E ratio of its stock will be high. A P/E ratio of 8 is relatively high.
b. the P/E ratio of its stock will be high. A P/E ratio of 8 is relatively low.
c. the P/E ratio of its stock will be low. A P/E ratio of 8 is relatively high.
d. the P/E ratio of its stock will be low. A P/E ratio of 8 is relatively low.
b
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In a perfectly competitive market, the market clearing price:
A) is always equal to the equilibrium price. B) is unrelated to the equilibrium price. C) is always lower than the equilibrium price. D) is always higher than the equilibrium price.
"Because of rent seeking, a monopoly may end up making zero economic profit." Is the previous statement correct or incorrect? Why?
What will be an ideal response?
The equilibrium real interest rate is the rate ________
A) at which the output gap is zero B) at which the inflation rate is low C) controlled by the central bank D) all of the above E) none of the above
Explain why public goods can be classified as market failure? Explain what problem arises when public goods are produced?
What will be an ideal response?