What should affect the fundamental value of a stock according to the efficient markets hypothesis?
What will be an ideal response?
If new information leads investors to change their opinions about the risk, liquidity, information costs, or tax treatment of the returns from owning the stock, the fundamental price of the stock will change.
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Use the following circular flow diagram to answer the question below.
If box A represents businesses or firms, B the resource market, and C households, and if flow (3) represents money payments to households, then flow (1) would represent
A. consumption expenditures. B. the flow of goods. C. resources. D. payments to resources.
An increase in nominal gross domestic product necessarily entails an increase in
A) both real output and the price level. B) either real output or the price level (or both). C) real output and employment. D) the price level and employment.
If the U.S. interest rate differential increases, in the foreign exchange market the demand for U.S. dollars ________ and the supply of U.S. dollars ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
The use of resources in the most productive way possible to produce the goods and services that have the greatest total economic value to society is called:
A. innovation. B. efficiency. C. sustainability. D. economic quantity.