Suppose the inflation rate has been 6 percent over the past four years. If the Federal Reserve announces an increase in the growth of the money supply, adaptive expectations would predict an inflation rate of 6 percent

The demand for computer chips is a downward sloping straight line. If there is an increase in the supply of computer chips, this change will

A) increase the price elasticity of demand for computer chips. B) decrease the price elasticity of demand for computer chips. C) have no effect on the price elasticity of demand for computer chips. D) have an unpredictable effect on the price elasticity of demand for computer chips.

According to the Gordon-Growth model, what is the value of a stock with a dividend of $2, required return on equity of 8% and expected growth rate of dividends of 4%?

A) $25 B) $26 C) $50 D) $52