The idea that any public information you will be able to find will prove of little value to you when buying and selling stocks, because that information is so quickly incorporated into the trading prices of stocks, is known as the
A) theory of efficient markets.
B) theory of fundamental analysis.
C) principle of context.
D) over-the-counter hypothesis.
A
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Overfishing leading to a rapid depletion of the stock of fish is an example of ________
A) the tragedy of the commons B) the free-rider problem C) the paradox of thrift D) the prisoners' dilemma
Economists refer to the series of induced increases in consumption spending that result from an initial increase in autonomous expenditures as the ________ effect
A) multiplier B) expenditure C) aggregate demand D) consumption
Evidence in support of the efficient markets hypothesis includes
A) the failure of technical analysis to outperform the market. B) the small-firm effect. C) the January effect. D) excessive volatility.
Ty lives in an apartment building and gets a benefit from playing his stereo. Olivia, who lives next door to Ty and often loses sleep due to the loud music coming from Ty's stereo, bears a cost from the noise. Olivia is threatening to call the police to force Ty to turn down his stereo. Under which of the following conditions would Ty be able to offer Olivia some amount of money to keep her from
calling the police and to allow him to continue to play his stereo loudly? a. The cost of the noise to Olivia must exceed the benefit of the music to Ty. b. The benefit of the music to Ty must exceed the cost of the noise to Olivia. c. The Coase Theorem guarantees that Olivia and Ty will always be able to come to an agreement that keeps Olivia from calling the police regardless of the individual benefits and costs. d. The cost of the noise to Olivia must exceed the benefit of the music to Ty by an amount greater than the transaction costs associated with the agreement.