- 14.1: The interest rate is 7 percent. Use the conceptof present value to ...
- 14.2: What benefit do people get from the marketfor insurance? What two p...
- 14.3: What is diversification? Does a stockholder getmore diversification...
- 14.4: Comparing stocks and government bonds,which has more risk? Which pa...
- 14.5: What factors should a stock analyst think aboutin determining the v...
- 14.6: Describe the efficient markets hypothesis andgive a piece of eviden...
- 14.7: Explain the view of those economists who areskeptical of the effici...
- 14.8: You have two roommates who invest in thestock market.a. One roommat...
- 14.9: When company executives buy and sell stockbased on private informat...
- 14.10: Jamal has a utility function U = W1/2, whereW is his wealth in mill...
Solutions for Chapter 14: Th e Basic Tools of Finance
Full solutions for Principles of Macroeconomics | 6th Edition
a group of firms acting in unison
an agreement among firms in a market about quantities to produce or prices to charge
the ability to produce a good at a lower opportunity cost than another producer
a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker
the failure of majority rule to produce transitive preferences for society
balances in bank accounts that depositors can access on demand by writing a check
total revenue minus total cost, including both explicit and implicit costs
the property of distributing economic prosperity uniformly among the members of society
a good for which, other things being equal, an increase in income leads to a decrease in demand
a tax that is the same amount for every person
isk that affects all companies in the stock market
the quantity of money available in the economy
the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior
claims that attempt to prescribe how the world should be
the percentage of the population whose family income falls below an absolute level called the poverty line
production possibilities frontier
a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology
the resources wasted when inflation encourages people to reduce their money holdings
a graph of the relationship between the price of a good and the quantity supplied
a situation in which quantity supplied is greater than quantity demanded
the idea that taxpayers with a greater ability to pay taxes should pay larger amounts