Rational expectations involve the assumption that
A) market participants make use only of information on the past performance of an asset in determining what they believe its price should be.
B) market participants rarely change their minds about the correct price of an asset.
C) financial markets are good at increasing liquidity, but poor at transmitting information.
D) market participants makes use of all available information.
D
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If the Fed unexpectedly increases the money supply, real GDP
a. increases because the resulting increase in the interest rate leads to a decrease in investment. b. increases because the resulting decrease in the interest rate leads to an increase in investment. c. decreases because the resulting increase in the interest rate leads to a decrease in investment. d. decreases because the resulting increase in the interest rate leads to an increase in investment. e. decreases because the resulting decrease in the interest rate leads to an increase in investment.
A consumer's willingness to pay directly measures
a. the extent to which advertising and other external forces have influenced the consumer's preferences. b. the cost of a good to the buyer. c. how much a buyer values a good. d. consumer surplus.
The determination of the nation's money supply is called:
A. trade policy. B. monetary policy. C. structural policy. D. fiscal policy.
(Consider This) Ticket scalping refers to:
A. the surplus of tickets that occurs when price is set below equilibrium. B. the shortage of tickets that occurs when price is set above equilibrium. C. pricing tickets so high that an athletic or artistic event will not be sold out. D. reselling a ticket at a price above its original purchase price.