Refer to the graph above. Which of the following changes will shift AD 1 to AD 2?
A cut in personal and business taxes
A shrinkage in the value of stocks and other financial assets
An increase in the value of the dollar relative to other currencies
An increase in real interest rates
A cut in personal and business taxes
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In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, the deadweight loss to society is
A) zero. B) efc. C) ebc. D) gac.
Some people claim that stocks follow a random walk. What does this mean?
a. The price of stock one day is about what it was on the previous day. b. Changes in stock prices cannot be predicted from available information. c. Stock prices are not determined by market fundamentals such as supply and demand. d. Prices of stocks of different firms in the same industry show no or little tendency to move together.