If congress passed a law last year that will increase

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Microeconomics: Private and Public Choice
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Chapter 14 / Exercise 6
Microeconomics: Private and Public Choice
Gwartney/Stroup/Sobel/Macpherson
Expert Verified
261.If Congress passed a law last year that will increase corporate taxes this year, holding other things constant, stock prices will _____ this year.A)increaseB)decreaseC)not changeD)It is impossible to say how stock prices will change.262.If all retail stores announce unexpectedly high sales volumes, holding other things constant, stock prices in the retail sector will:A)increase.B)decrease.C)not change.D)It is impossible to say how stock prices will change.263.If interest rates on bonds rise, holding other things constant, stock prices will:A)increase.B)decrease.C)not change.D)It is impossible to say how stock prices will change.264.When a bond becomes more attractive as an asset because of a rise in the interest rate:A)the price of stock, a substitute asset, will rise.B)the price of stock, a substitute asset, will fall.C)the future price of bonds will fall.D)people will stop buying bonds and buy other assets.265.Income to the owners of commercial real estate is in the form of:A)interest.B)dividendsC)transfer payments.D)rent and profit from selling the property at a price higher than its purchase price.266.When interest rates increase, the demand for commercial and residential real estate will _____ and the price of real estate will _____.A)increase; increaseB)increase; decreaseC)decrease; increaseD)decrease; decreasePage 54
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Microeconomics: Private and Public Choice
The document you are viewing contains questions related to this textbook.
Chapter 14 / Exercise 6
Microeconomics: Private and Public Choice
Gwartney/Stroup/Sobel/Macpherson
Expert Verified
267.When interest rates decrease, the demand for commercial and residential real estate will _____ and the price of real estate will _____.A)increase; increaseB)increase; decreaseC)decrease; increaseD)decrease; decrease268.A random walk occurs when an asset price:A)moves in a predicable direction but with random error.B)makes unpredictable movements.C)moves in a predictable way with no error.D)moves slowly but predictably.269.According to the efficient markets hypothesis, if you are trying to find out what a stock is really worth, you should:A)look up the current stock price.B)study past trends in the stock price.C)study the underlying determinants of the company's future profits.D)examine its recent price changes.270.Which of the following is (are) a serious challenge(s) to the efficient markets hypothesis?A)Stock prices fluctuate more than can be explained by news about fundamentals.B)Individual investors behave in systematically irrational ways.C)Stock prices follow a random walk.D)Stock prices fluctuate more than can be explained by news about fundamentals, and individual investors behave in systematically irrational ways.

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