The activities of speculators often reduce the risk borne by other stock market participants
a. True
b. False
Indicate whether the statement is true or false
True
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A market structure in which a small number of producers compete against each other is
A) monopolistic competition. B) oligopoly. C) monopoly. D) perfect competition.
What does elasticity measure?
What will be an ideal response?
According to real business cycle theory, an increase in financial frictions might lead to ________, if ________
A) a decrease in output; the rise in the credit spread causes a leftward shift of aggregate demand B) a decrease in inflation; the disruption of capital markets results in a leftward shift of long-run aggregate supply C) a decrease in output; the disruption of capital markets results in a leftward shift of long-run aggregate supply D) a decrease in output; a decline in expected output causes a leftward shift of aggregate demand
With flexible exchange rates
A. The balance of trade is zero. B. The equilibrium exchange rate is determined in a foreign exchange market. C. All countries will run either a trade surplus or trade deficit. D. Foreign exchange reserves are used to offset balance-of-payment deficits.