If the stock market behaves according to the efficient market hypothesis, then
a. investment in stocks cannot be profitable.
b. future changes in stock movements are completely predictable.
c. current stock prices reflect all currently available information.
d. both b and c.
e. all of the above.
C
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If income decreases or the price of a complement rises
A) the demand curve for a normal good shifts leftward. B) the demand curve for a normal good shifts rightward. C) there is an upward movement along the demand curve for the good. D) there is a downward movement along the demand curve for the good.
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower