Why might someone be willing to pay more than the fundamental value for a stock?
She may believe that others will pay even a higher price for it in the future.
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What happens to the money supply when the Fed sells government bonds?
A) The money supply tends to rise. B) The money supply tends to fall. C) Nothing. D) It's impossible to determine, because bonds aren't money.
The Interstate Commerce Commission (ICC) regulates railroads, barges and trucks. Suppose technical change lowers the costs of railroads
As a result, the ICC permits railroads to lower prices some but also alters the rates of barges and trucks so they get additional business. The ICC would be acting consistently with A) the capture theory of regulation. B) the public interest theory of regulation. C) the share-the-gains, share-the-pains theory of regulation. D) None of the theories presented in the text since economic regulation is specific to a single industry and not to agencies that cover more than one industry. That is the province of social regulation.