Answer the following questions true (T) or false (F)
1. If you purchase a share of stock from your friend who initially purchased the stock three years ago, your purchase of the stock represents a transaction in the secondary financial market.
2. Direct finance includes the sale by a corporation of stocks or bonds, but does not include borrowing money from a bank.
3. You purchase a share of Facebook stock from a friend who purchased the stock 1 year ago. Your purchase of the stock represents a transaction in the primary financial market.
1. TRUE
2. TRUE
3. FALSE
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Private and state universities are substitutes. Which of the following would tend to increase the demand for state universities?
A) A fall in private university tuition B) An increase in private university tuition C) An increase in interest rates on student loans (a complementary good) D) Higher dorm fees at state universities
In an auction where the bidders values are $740, $700, $660, $650, $400, $325 and $300, the highest three bidders decide to form a bid-rigging cartel. What would the winning bid be in this auction?
a. $741 b. $701 c. $651 d. $631
Some costs cannot be varied no matter how long the period in question. These are called
a. overheads. b. total costs. c. fixed costs. d. variable costs.
A country will have a balance-of-payments surplus when its exchange rate:
A. is overvalued. B. equals the market equilibrium value. C. is flexible. D. is undervalued.