An increase in the perceived riskiness of Company A stock ________ the risk premium investors require to purchase Company A stock and ________ the price of Company A stock.
A. decreases; decreases
B. increases; decreases
C. decreases; increases
D. increases; increases
Answer: B
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A fear that consumption of ice cream may be related to a life threatening disease spreads rapidly through France. The market result will be:
a. the demand falls, price decreases and therefore French consumers buy more ice cream. b. the demand falls, price decreases and the quantity supplied therefore falls. c. a fall in demand followed by a fall in supply. d. the equilibrium quantity falls, but the price does not change.
Which branch of study helps in economic decision making when an individual's behavior determines the payoffs to others?
A) Microeconomics B) Macroeconomics C) Game theory D) Public economics
A decrease in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate
Which of the following would not be a consequence of an increase in the U.S. government budget deficit?
a. U.S. interest rates rise b. U.S. net capital outflow falls c. the real exchange rate of the U.S. dollar depreciates d. the U.S. supply of loanable funds shifts left