To the extent that current profits are directly related to future profits, a high price/earnings ratio would indicate that stocks are
a. inexpensive.
b. expensive.
c. going to increase in value in the future.
d. most likely to fall in value if interest rates decline.
B
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Marginal propensity to consume
A) is the amount of consumption that is independent of the level of disposable income. B) is the same as the break-even point. C) is the proportion of total disposable income that is consumed. D) gives the amount a person changes planned consumption for a change in real disposable income.
Which of the following is not demonstrated by a production possibility curve?
A. scarcity B. opportunity cost C. necessity for choice due to scarcity D. price
In a perfectly competitive market the term "price taker" applies to
A) sellers and buyers.
B) sellers but not buyers.
C) buyers but not sellers.
D) only the smallest sellers and buyers.
If the interest rate increases, then the:
A. economy will move to a new point along the existing consumption function. B. consumption function will shift upward. C. investment demand curve will shift downward. D. investment demand curve will shift upward.