Suppose that monetary policy becomes more expansionary, and as a result, the future rate of inflation is higher. Will this be good for the stock market?
a. Yes; the inflation will lead to higher wages, and this will be good for both the economy and the stock market.
b. No; the inflation will lead to higher nominal interest rates, and this will reduce the present value of the future net earnings derived from stocks.
c. Yes; the inflation rate will reduce the long-run rate of unemployment, and this will be good for the stock market.
d. No; the expansionary monetary policy will lead to lower real interest rates, and this is generally bad for both the economy and the stock market.
B
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Specialization is another word for
A) pursuing one's comparative advantage. B) the division of labor. C) producing at a comparably lower opportunity cost. D) all of the above. E) none of the above.
As of 2008, the members of the WTO account for what percentage of world trade?
A) 3 percent. B) 23 percent. C) 57 percent. D) 97 percent