Other things being constant, when a firm sells new shares of stock, the
a. supply of the stock increases and the price decreases.
b. supply of the stock decreases and the price increases.
c. demand for the stock increases and the price increases.
d. demand for the stock decreases and the price decreases.
a
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Which of the following is true of central banks?
A) They are responsible for issuing currency. B) They control the amount of money in circulation. C) They have considerable influence over the level of interest rates. D) all of the above
In 2008, the Treasury and Federal Reserve took action to save large financial firms such as Bear Stearns and AIG from failing. Which of the following is one reason why these measures were taken?
A) The bankruptcy of a large financial firm would force the firm to sell its holdings of securities, which could cause other firms that hold these securities to also fail. B) The Emergency Economic Stabilization Act required the Fed and the Treasury to provide financial assistance to firms that participated in regular open market actions with the Fed. C) The failure of these firms would have forced the Fed to increase interest rates, which could have led to a severe recession. D) The Fed and the Treasury wanted to allow Freddie Mac and Fannie Mae more time to buy the firms before they went bankrupt.
Vertical integration can sometimes be used to
a. Avoid paying higher taxes b. Reward the retailer for undertaking the risk inherent in introducing a new product c. Serve as a "signal" of the manufacturer's belief of the likely success of his product d. All of the above
Which of the following describes the relationship among income, disposable income, taxes, and transfer payments?
a. Taxes plus transfers equal income plus disposable income b. Disposable income equals income divided by the sum of taxes and transfers c. Disposable income equals income minus taxes plus transfers d. Disposable income equals income plus taxes plus transfers e. Taxes plus transfers equal disposable income minus income