A stock's price will fall if there is
A) a decrease in perceived risk.
B) an increase in the required rate of return.
C) an increase in the future sales price.
D) current dividends are high.
B
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Commercial society provides incentives to specialize by
A) following one's comparative disadvantage. B) pursuing one's comparative advantage. C) producing somewhere outside the production possibilities frontier. D) producing a narrowly defined good without an interest in the wealth it generates to the producer.
When the Fed reduces the discount rate, it is more likely that the economy experiences _________ and the fall in the rate will _____________
a. inflation; decrease the use of open market operations b. inflation; decrease the federal funds rate as well c. recession; increase the federal funds rate as well d. recession; decrease the cost to banks of borrowing from the Fed e. inflation; decrease the cost to banks of borrowing from the Fed