In a world of certainty about future demand and supply, speculators cause price fluctuations across time to decrease.
Answer the following statement true (T) or false (F)
True
Rationale: When speculators can accurately predict future prices (because of certainty about future demand and supply), they will buy low when price is low and sell high when price is high -- thus decreasing price when demand and supply alone would otherwise cause prices to be high and increase price when demand and supply along would otherwise cause prices to be low.
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A) herding B) anchoring C) signaling D) sniping
Suppose the marginal product of labor equals 1/L. If the firm can sell its output for $10 per unit, and the wage is $1 per unit, how many units of labor will the firm hire?
A) 0 B) 1 C) 10 D) 100