Respond to the following statement with a brief explanation: "The Federal Reserve can improve the performance of the stock market but it cannot prevent a stock market crash."
What will be an ideal response?
The Federal Reserve contributes to the efficiency of the stock market primarily by reducing systematic risk, which reduces the cost across all investing. The Fed does not control the stock market it sets interest rates and makes sure that banks have funds to honor their commitments. The Fed is not large or powerful enough to eliminate risk that is inherent in an investment.
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A recent push in development economics is to:
A. put more focus on a program's effectiveness. B. fund only those programs that prove to be effective. C. stop the trial and error process of funding programs that "might" work. D. All of these statements are true.
Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.
A. An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. B. Due to process innovations in computer chip manufacturing, the market supply of computers increased. C. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. D. Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.
In the Microsoft antitrust case, a federal court ruled to break up the company on the basis of the:
A. size of the corporation. B. firm's effect on the stock market. C. firm's large market share. D. firm's market behavior.
Suppose that Book-Cost Busters (BCB), without authorization, reproduced a best-selling novel and placed it for downloading on the BCB pay-for-use website. This action would violate the publisher's:
A. profit rights. B. patent. C. copyright. D. trademark.