How can stock prices affect spending by businesses and households?
What will be an ideal response?
Rising stock prices make it easier for corporations to raise funds. Since stocks make up a significant portion of household wealth, changes in stock prices can affect wealth and thus household spending. Changes in stock prices can also affect consumer and business expectations. For example, declining stock prices may make households more uncertain about their jobs and income, leading to less spending.
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Suppose the Fed purchases $1 million in bonds in the open market. Explain how the money supply can increase by more than $1 million
What will be an ideal response?
A charter school is an independent _____ school with _____ financing
a. private; private b. public; public c. private; public d. public; private
Economic theory states that losing comparative advantage in one good means creating a comparative advantage in another. This suggests that:
A. those who experience the transition may find it difficult in the short run. B. in the long run people may not like it, but no one will complain in the short run. C. outsourcing will always be good for every member of a society. D. it can be seen as a success in the short run.
The mathematical representation of the satisfaction a consumer derives from a bundle of goods is called the
A) Demand curve. B) Engel curve. C) Utility function. D) Indifference curve.