Stock market bubbles are:
A. synonymous to stock market crashes.
B. the increase in a stock's price resulting from reported higher profits by a firm.
C. those periods of time when the overall level of the stock market is rising at a slow rate reflecting market fundamentals.
D. persistent and expanding gaps between stocks' actual prices and the prices warranted by the fundamentals.
Answer: D
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Calculate the price elasticity of supply for the following goods. Also comment on the elasticity in each case
a) When the price of a good is $100, 200 units are supplied. But when the price increases to $300, 220 units are supplied. b) When the price of a good is $50, 50 units are supplied. But when the price decreases to $30, 10 units are supplied.
What does it mean if the purchasing power in 1950 was 4.15 relative to the 1982 base year?
a. It took $4.15 in 1950 to buy what $1 bought in 1982. b. The average price level in 1982 was five times as high as in 1950. c. $4.15 in 1950 had the same nominal money value as $1 in 1982. d. It took $4.15 in 1982 to buy what $1 bought in 1950. e. Nominal prices have increased by more than 400 percent between 1950 and 1982, but the real value of money has not changed.
One reason economists began to look at more effective coordination mechanisms is that they began to:
A. focus more on the assumption that people are rational. B. focus more on people's predictably irrational behavior. C. rely more heavily on deductive reasoning. D. use advanced calculus in their models.
Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.
Figure 27.3Refer to Figure 27.3. Assume the economy is at Point A. Higher oil prices shift the aggregate supply curve to AS2. If the government decides to counter the effects of higher oil prices by increasing net taxes, then the price level will be ________ than P2 and output will be ________ than Y2.
A. less; less B. less; greater C. greater; less D. greater; greater