Which of the following is correct concerning stock market irrationality?
a. Bubbles could arise, in part, because the price that people pay for stock depends on what they think someone else will pay for it in the future.
b. Economists almost all agree that the evidence for stock market irrationality is convincing and the departures from rational pricing are important.
c. Some evidence for the existence of market irrationality is that informed and presumably rational managers of mutual funds generally beat the market.
d. All of the above are correct.
a
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Among state member and national banks, __________ have federal deposit insurance through the FDIC
A) all B) virtually all C) a minority D) none of them
The economy's self-correcting mechanism
a. tends to push unemployment toward a specific point called the natural rate of unemployment. b. works better at correcting inflationary gaps than recessionary gaps. c. cannot work if the Phillips curve is vertical. d. ensures that the economy will not have to endure a long period of high unemployment.