Which of the following is a TRUE statement about stock markets?
A) Economists can make above-average profits in the stock market because of their specialized knowledge of economics.
B) It is always better to buy growth stocks than the older and more stable blue-chip stocks.
C) The stock market on average over time is random and totally unrelated to the performance of the economy.
D) It is illegal for a friend of a corporate executive to make large profits in the stock market by using his inside information.
D
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Suppose that the absolute price elasticity of demand for hamburger is 1.15 and that the absolute price elasticity of demand for steak is 2.4. Then the absolute price elasticity of demand for beef will be
A) less than 1.15. B) more than 2.4. C) between 1.15 and 2.4. D) equal to 1.15.
The money supply decreased and the AD curve shifted to the left. This is consistent with the
A) Keynesian transmission mechanism when there is neither a liquidity trap nor interest-insensitive investment. B) monetarist transmission mechanism. C) Keynesian transmission mechanism when there is a liquidity trap. D) Keynesian transmission mechanism with interest-insensitive investment. E) a and b