Explain what information that changes in the value of a firm's stocks provide for a firm's managers and for investors
What will be an ideal response?
Changes in the value of a firm's stocks provide important information for a firm's managers, as well as for investors. An increase in the stock price means that investors are more optimistic about the firm's profit prospects, and the firm's managers might want to expand the firm's operations as a result. By contrast, a decrease in the firm's stock price indicates that investors are less optimistic about the firm's profit prospects, so management may want to shrink the firm's operations.
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In the quantity theory of money, the quantity of money is assumed to
A) not influence the velocity of circulation. B) rise during recessions. C) fall during recessions. D) be constant.
A firm's economic profit is the difference between its total revenue and total costs, including the opportunity costs of the resources used in the business
a. True b. False Indicate whether the statement is true or false