All other things equal, a decrease in the equity risk premium leads to a(n):
A. decrease in the present value of stock.
B. increase in the required return on stock.
C. decrease in dividend growth.
D. increase in the price of equity shares.
Answer: D
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The evidence usually cited to prove that globalization hurts workers in developing countries
A) is inconclusive due to poor statistical design of the underlying samples. B) is inconclusive due to the poorly funded Central Statistical Office of Mexico. C) is inconclusive due to the ambiguous theoretical implications of the findings. D) is conclusive. E) does not take into account the Heckscher-Ohlin model.
If there is a surplus in the oil market, then the price of oil will:
a. rise. b. fall. c. remain unchanged. d. react unpredictably.
Which of the following factors substantially reduces the effectiveness of discretionary changes in tax rates or government expenditures as a stabilization tool?
a. Even though computer models have enhanced our forecasting ability, policy makers at the Federal Reserve have been reluctant to utilize information supplied by the models. b. When fiscal policy is altered, the Fed generally shifts monetary policy in a manner that offsets the impact of the fiscal action. c. Changes in government expenditures and taxes are always offset by equal changes in private spending. d. Since it takes time for fiscal policy to work and since the future is difficult to forecast, it is difficult to time fiscal policy changes correctly.
Barriers to entry might include all of the following EXCEPT
A. positive economic profits. B. government franchise. C. ownership of essential resources. D. patents and copyrights.