Rules used to predict movements in stock prices based on past patterns are, according to the efficient markets hypothesis
A) a waste of time.
B) profitably employed by all financial analysts.
C) the most efficient rules to employ.
D) consistent with the random walk hypothesis.
A
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Suppose the value of the CPI is 1.100 in year one, 1.160 in year two, and 1.270 in year three. Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three. The price level is increasing, the inflation rate is ________, and the relative price of computers is ________.
A. increasing; decreasing B. constant; increasing C. increasing; increasing D. constant; decreasing
If the price of a soda was 15 cents in 1970, when the CPI was 50, and 50 cents in 2007, when the CPI was 172, then
A) the price of the soda was greater in real value in 1970 than in 2007. B) prices on average have increased 567 percent. C) the price of a soda has increased a greater percentage than the CPI. D) prices on average have increased 244 percent. E) the real price of a soda is the same in 1970 and 2007.
In the real intertemporal model, an adverse sectoral shock acts to
A) reduce real output and reduce the real interest rate. B) increase real output and increase the real interest rate. C) increase real output and reduce the real interest rate. D) reduce real output and increase the real interest rate.
Consumers usually buy fewer units of a good than the quantity that would maximize total utility from consuming the good because
A. marginal utility becomes zero after just a few units of the good. B. they are not rational. C. of the law of demand. D. they have limited incomes.