This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose the Fed implements a monetary expansion that is at least partially unexpected. Explain what ... (Read 84 times)

sc00by25

  • Hero Member
  • *****
  • Posts: 596
on: Jun 30, 2018
Suppose the Fed implements a monetary expansion that is at least partially unexpected. Explain what effect this will have on stock prices.
 
  What will be an ideal response?

Question 2

We know with certainty that a tax increase must cause which of the following?
 
  A) an increase in investment
  B) a reduction in investment
  C) no change in investment
  D) none of the above


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

macagnavarro

  • Sr. Member
  • ****
  • Posts: 334
Reply #1 on: Jun 30, 2018
Answer to Question 1

This will cause the interest rate to fall and output to rise. The lower interest rate will increase the present value of future dividends. The increase in output will cause an increase in expected dividends because profits are now expected to be higher. Both of these effects cause stock prices to rise.

Answer to Question 2

D


sc00by25

  • Member
  • Posts: 596
Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

lindahyatt42

  • Member
  • Posts: 322
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Alzheimer's disease affects only about 10% of people older than 65 years of age. Most forms of decreased mental function and dementia are caused by disuse (letting the mind get lazy).

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Thyroid conditions cause a higher risk of fibromyalgia and chronic fatigue syndrome.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

Thyroid conditions may make getting pregnant impossible.

Tropical savanna and grazers in Kenya. The tropical savanna landscape is partially maintained by per Tropical savanna and grazers in Kenya. The tropical savanna landscape is partially maintained by per
This modified model of Easton’s systems theory puts government decision makers as the source of pol This modified model of Easton’s systems theory puts government decision makers as the source of pol
Expansion Ratios for Liquefied Compressed Gases Expansion Ratios for Liquefied Compressed Gases
A Partially Filled 50-Unit Insulin Syringe A Partially Filled 50-Unit Insulin Syringe
Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ... Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ...
Explain the myogenic autoregulation of the glomerular filtration rate Explain the myogenic autoregulation of the glomerular filtration rate
Video: Wound Cultures

For a complete list of videos, visit our video library