When investors follow a "herd instinct," they make decisions:
A. based on hearsay, not objective information.
B. based on emotion, not objective information.
C. as a group, inflating the prices of goods somewhat arbitrarily.
D. based on the sound logic of a group, rather than the individual.
B. based on emotion, not objective information.
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Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPod music player. CEO Steve Jobs also unveiled cheaper models of its Touch music player, a touchscreen-only device
An 8-gigabyte version now costs $230, down from $300. A 32-gigabyte model costs $400, down from $500. Calculate the price elasticity of demand for a 32 gigabyte Touch player if the quantity demanded increases from 850,000 to 950,000 the month after the price decrease. A) 0.5 B) 1.5 C) 1 D) 0.75
The permanent income hypothesis highlights the phenomenon of ________
A) the intertemporal budget constraint B) a binding borrowing constraint C) autonomous consumption D) consumption smoothing
In general, who will benefit as the result of a tariff? I. Domestic producers II. Domestic consumers III. The domestic government
A) I only B) II only C) both I and III D) both II and III E) All of the above are correct.
Rational expectations are based on the past alone, while adaptive expectations are based on the past, the present, and the future
Indicate whether the statement is true or false