If so what would we expect to see in the real world 4

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Unformatted text preview: o change the money supply. Suppose that the Fed decides to increase the money supply. How do you think this action will affect the stock market? 2. Analysis. If bonds and stocks are substitutes, then what should we see happen as bonds offer higher returns? 3. Cause and Effect. Suppose that there is no cause-effect relationship between the current condition of the federal budget (deficit, balance, or surplus) and the Dow Jones Industrial Average. If so, what would we expect to see in the real world? 4. Writing. Write a one-page paper discussing the factors that you think will influence the stock market over the next several years. Explain how the factors that you have identified will cause people to want to buy more stocks, sell more stocks, or turn entirely to other types of investments. 5. Economics in the Media. Check the newspaper and find the Dow Jones Industrial Average (DJIA) for the most recent date. 6. Economics in the Media. Check the newspaper and find the current stock price for five of the 30 companies that compose the DJIA. 7. Economics in the Media. Find an article in the newspaper or a story on television news that mentions one of the following: stock market, bond market, put option, call option, DJIA, S&P 500, or NASDAQ. Discuss the contents of the article or story. Go to www.emcp.net/economics and choose Economics: New Ways of Thinking, Chapter 16, if you need more help in preparing for the chapter test. Chapter 16 Stocks and Bonds 457 16 (428-459) EMC Chap 16 11/18/05 9:35 AM Page 458 Is Free Trade the Best Policy for the United States? O klahoma can’t impose a tariff or quota on goods produced in Wisconsin, but the United States can and does impose tariffs and quotas on goods pro- duced in other countries. For example, the United States currently imposes tariffs on garments, textiles, sugar, and many their shoes in the United States, or if only the 10 U.S. companies sell their shoes in the United States? The answer is obvious. I am better off when 40...
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