Which of the following is true?
a. An increase in the interest rate will tend to increase stock prices.
b. A reduction in the interest rate will tend to increase stock prices.
c. An increase in the inflation rate will tend to increase stock prices.
d. There is no reason to believe that changes in interest rates will influence stock prices.
B
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Refer to Figure 13-1. Ceteris paribus, an increase in firms' expectations of the future profitability of investment spending would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Corporate income taxes are levied after dividends are distributed to stockholders
Indicate whether the statement is true or false
As the prevailing interest rate increases, all of the following occur except
A. Quantity demanded of loanable funds decreases. B. Cost of borrowing rises. C. Supply curve for loanable funds shifts to the right. D. Quantity supplied of loanable funds increases.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower