If in an efficient market all prices are correct and reflect market fundamentals, which of the following is a FALSE statement?
A) A stock that has done poorly in the past is more likely to do well in the future.
B) One investment is as good as any other because the securities' prices are correct.
C) A security's price reflects all available information about the intrinsic value of the security.
D) Security prices can be used by managers to assess their cost of capital accurately.
A
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If there is unemployment in an economy, then the
A) economy is operating at an unattainable point. B) production possibilities frontier will shift inwards. C) production possibilities frontier must be bowed inward. D) economy is producing at a point inside the production possibilities frontier. E) production possibilities frontier will shift outwards.
The LM curve will shift to the right when government expenditures increase
Indicate whether the statement is true or false
A noncooperative game situation may occur when
A) firms collude. B) firms find collusion too costly. C) firms merge. D) firms agree to price fixing.
If actual real GDP is greater than the equilibrium level of real GDP (i.e., the aggregate expenditures function is below the 45-degree line), what happens to restore equilibrium to the economy?