Predictions of stock prices by stock market analysts
a. usually improve on simple extrapolation of past trends.
b. are good in both the short term and in the long term.
c. are poor since Wall Street does not pay enough to attract the best analysts.
d. are poor because of randomness.
d
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Everything else held constant, if consumption expenditure increases by 65 for a 100 increase in disposable income, the mpc is
A) 0. B) 0.5. C) 0.65. D) 1.
Suppose in the market for used cars, buyers would be willing to pay $9,000 for a car in good condition, while buyers would have to incur a cost of $3,500 to repair a car in poor condition. Assume a risk-averse buyer is aware that some of the cars are lemons, but is uninformed about the probability of a car being in good condition or otherwise. What price would this buyer, seeking only to minimize
risk, be willing to pay for a car? a. $3,925 b. $5,500 c. $7,775 d. $5,850