What is the random walk theory?
What will be an ideal response?
The random walk theory is the theory that prices of stocks move independently in securities markets and, hence, that there are no predictable trends that can be used to make riskless profits. The theory assumes that information about companies and stocks quickly are processed by the market and reflected in changed prices. This process happens so fast that no one can generate riskless profits.
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What was the crucial factor permitting cotton textile production to take off in New England between 1790 and 1815?
(a) The imposition of high tariff rates (b) A lowering of import tariffs by Britain (c) The blocking of trade with England through the Embargo and the War of 1812 (d) A relaxation of regulations restricting exports of machinery by Britain
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
According to the graph shown, the amount of deadweight loss created by the imposition of a tariff is area:
A. JK B. IJKL C. IL D. FGJK
As the time a person has to adjust to a price change increases, the elasticity of demand will ______.
a. decrease b. increase c. remain constant d. fluctuate
If the equilibrium level of real Gross Domestic Product (GDP) is greater than the full-employment real Gross Domestic Product (GDP) consistent with the position of the economy's long-run aggregate supply (LRAS) curve, then the difference between full-employment real Gross Domestic Product (GDP) and current equilibrium real Gross Domestic Product (GDP) is
A. an inflationary gap. B. the level of output consistent with natural unemployment. C. a recessionary gap. D. an aggregate demand shock.