Should stock market speculation be encouraged or discouraged?
Speculators, who profit by "buying on bad news and selling on good," play a valuable role by acting as a source of insurance for those looking to reduce risk. Speculators increase demand during bad times, thus moderating a fall in stock price, and increase supply during good times, thus cushioning a high price. They also are willing to guarantee a certain price, attractive to the stockholder (or farmer) who does not want to be whipsawed by the unknown changes in the market.
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Ted and Alice want to make sure that their children will inherit lots of money when they die, so that their children do not have to struggle the way they themselves did. Saving more in response to this is a______ reason for saving.
A. precautionary B. life-cycle C. bequest D. private
During 2013, exports increase from $1.0 trillion to $1.5 trillion. If the slope of the aggregate planned expenditure (AE) curve is 0.75, real GDP increases by
A) $8.0 trillion. B) $2.0 trillion. C) $6.0 trillion. D) $1.0 trillion. E) $4.0 trillion.
A tariff is a
A. subsidy to workers harmed by U.S. trade with foreign countries. B. limit on the quantities of a good that can be imported each year. C. tax on exports that tends to make them cheaper for foreigners to buy. D. tax on imports that raises their prices and makes them less attractive to domestic consumers.
Suppose that the federal government suddenly declared that wheat was to be used as money. What is a possible outcome of that decision?
A. The value of the "wheat dollar" would be unstable depending on crop yields from year to year. B. Farmers would replace corn and soy crops with wheat. C. Wheat would function as money so long as people accept it in exchange for goods and services. D. All of these are possible outcomes.