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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
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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- Winter '14