what's the danger in the fact that the market value of a stock is based on...
what's the danger in the fact that the market value of a stock is based on supply and demand? How might this cause a bubble?
Homework Answers
If the market value of stock is based on pure supply and demand, then the value will deviate from its fundamentals and the stock will be similar to a speculative asset. This speculation would attract more traders than investors looking for short term gains and in the process create asset bubble by raising the prices. The bubble while in the short term would stay, however in the long term, as the asset moves to its fundamental value, the bubble would burst causing losses to market participants and the economy.
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what's the danger in the fact that the market value of a stock
is based on...
. From March 2009 to 2013, the U.S. stock market more than doubled in value. How might...
. From March 2009 to 2013, the U.S. stock market more than doubled in value. How might this have affected aggregate demand? What happens to aggregate demand when the stock market plunges? pleas answer it by typing
5- Based on the data in the following table and the fact that potential GDP is...
5- Based on the data in the following table and the fact that potential GDP is $8 trillion: Price level Aggregate demand (trillions of 2000 dollars) Short-run aggregate supply trillions of 2000 dollars) 100 110 120 130 100 a. Describe the situation of this economy and explain the reasons behind it. (5pts) b. Explain step-by-step the situation and the market adjustment that will take place if the price level is 110. Illustrate graphically. (5pts)
The fact that the majority of stock mutual funds cannot outperform the stock market averages is...
The fact that the majority of stock mutual funds cannot outperform the stock market averages is consistent with: the no free lunch principle. the risk-return trade-off principle. the efficient markets hypothesis. the active trading hypothesis.
The market price of hamburgers in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease
The market price of hamburgers in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because several new burger joints have recently opened in the area. Other students attribute the decrease in the price of hamburgers to a recent decrease in college student enrollment. The first group of students thinks the decrease in the price of hamburgers is due to the fact that...
The market price of calzones in a college town decreased recently, and the students in an...
The market price of calzones in a college town decreased recently, and the students in an econamics dlass are debating the cause of the price decrease. Some students suggest that the price decreased because the price of dough, an important ingredient other students attribute the decrease in the price of calzones to a recent increace in the price of beer. Everyone agrees that the increase in the p of beer was caused by a recent increase in the price of...
15. Another supply and demand puzzle The market price of pizzas in a college town decreased...
15. Another supply and demand puzzle The market price of pizzas in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because the price of dough, an important ingredient for making pizzas, has decreased. Other students attribute the decrease in the price of pizzas to a recent decrease in college student enrollment. The first group of students thinks the decrease in the...
15. Another supply and demand puzzle The market price of pizzas in a college town increased...
15. Another supply and demand puzzleThe market price of pizzas in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several pizza parlors in the area have recently gone out of business. Other students attribute the increase in the price of pizzas to a recent increase in college student enrollment.The first group of students thinks the increase in the price of...
15. Another supply and demand puzzle The market price of calzones in a college town increased...
15. Another supply and demand puzzleThe market price of calzones in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several pizza parlors in the area have recently gone out of business. Other students attribute the increase in the price of calzones to a recent increase in college student enrollment.The first group of students thinks the increase in the price of...
The market price of cheeseburgers in a college town decreased recently, and the students in an...
The market price of cheeseburgers in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because several new burger joints have recently opened in the area. Other students attribute the decrease in the price of cheeseburgers to a recent decrease in college student enrollment. The first group of students thinks the decrease in the price of cheeseburgers is due to the fact...
lized The Market Forces of Supply and Demand (Mobile-Enabled) Graded Assignment | Read Chapte Due Friday...
15. Another supply and demand puzzle,The market price of hamburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because the price of beef, an important ingredient for making hamburgers, has increased. Other students attribute the increase in the price of hamburgers to a recent increase in the price of pizza at local pizza parlors.Everyone agrees that the increase in the...
5- Based on the data in the following table and the fact that potential GDP is $8 trillion: Price level Aggregate demand (trillions of 2000 dollars) Short-run aggregate supply trillions of 2000 dollars) 100 110 120 130 100 a. Describe the situation of this economy and explain the reasons behind it. (5pts) b. Explain step-by-step the situation and the market adjustment that will take place if the price level is 110. Illustrate graphically. (5pts)
The market price of calzones in a college town decreased recently, and the students in an econamics dlass are debating the cause of the price decrease. Some students suggest that the price decreased because the price of dough, an important ingredient other students attribute the decrease in the price of calzones to a recent increace in the price of beer. Everyone agrees that the increase in the p of beer was caused by a recent increase in the price of...
15. Another supply and demand puzzle The market price of pizzas in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because the price of dough, an important ingredient for making pizzas, has decreased. Other students attribute the decrease in the price of pizzas to a recent decrease in college student enrollment. The first group of students thinks the decrease in the...
The market price of cheeseburgers in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because several new burger joints have recently opened in the area. Other students attribute the decrease in the price of cheeseburgers to a recent decrease in college student enrollment. The first group of students thinks the decrease in the price of cheeseburgers is due to the fact...
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