Suppose an increase in government spending occurs that is at least partially unexpected. Explain what effect this will have on stock prices
What will be an ideal response?
Output rises and interest rates rise. Here, the effects are ambiguous. The rise in the interest rate will reduce stock prices while the increase in Y will increase them.
Economics
You might also like to view...
The core inflation rate measures changes in the
A) prices of consumer goods except health care. B) prices of all consumer goods. C) prices of consumer goods except food and fuel. D) price of only two consumer goods: food and fuel. E) prices of all the "core" goods and services a typical family buys.
Economics
According to its advocates, what are four advantages product differentiation and advertising provide to consumers?
What will be an ideal response?
Economics