The demand curve for shares of a stock is typically
a. downward sloping, because people calculate present value according to different expectations and attitudes toward risk
b. vertical, because only a fixed number of shares of stock are available
c. horizontal, because everyone values the stock according to its present value
d. upward sloping, because a higher stock price signals to potential shareholders that the firm is more valuable
e. horizontal, because no one is willing to pay more than the market price
A
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Consider the above figure. Autonomous consumption, in this scenario, is equal to
A) $30. B) $80. C) $60. D) $40.
The condition that states that the domestic interest rate equals the foreign interest rate minus the expected appreciation of the domestic currency is called
A) the purchasing power parity condition. B) the interest parity condition. C) money neutrality. D) the theory of foreign capital mobility.
A bank's required reserves are:
A. a financial liability for the Fed. B. a financial asset for the Fed. C. counted as money. D. a financial liability for the bank.
If an individual demands a good, it means that he or she
A. Is willing and able to purchase the good at some price. B. Must need the good. C. Prefers the good to all other choices. D. Has a strong desire for the good.