If the efficient markets hypothesis is true, then ?

Related Mcqs:

1. The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?

   A. Rational-expectations hypothesis
   B. Passive-expectations hypothesis
   C. adaptive expectations hypothesis
   D. lagged-expectations hypothesis.

2. The conclusion that free, unregulated markets will produce an efficient outcome breaks down if ?

   A. households do not have perfect information
   B. firms are not price takers in input markets
   C. firms are not price takers in the output market
   D. all of the above

3. Markets fail to produce an efficient allocation of resources, but government also fail because ?

   A. elected officials will act selflessly for the good of society and ignore their own self interest
   B. the managers of government agencies are trying to maximize the profit of their agency and they ignore the implications that this has on other departments
   C. the optimal level of public goods may be too expensive for the society to produce
   D. the measurement of social damages and benefits is difficult and imprecise

4. Roberto and Thomas live in a university hall of residence. Reberto values playing loud music at a value of €100. Thomas values peace and quiet at a value of €150. Which of the following statements is true about an efficient solution to this externality problem if Roberto has the right to play loud music and if there are no transaction costs ?

   A. Thomas will pay Roberto between €100 and €150 and Roberto will continue to play loud music
   B. Roberto will pay Thomas €150 and Roberto will continue to play loud music
   C. Thomas will pay Roberto between €100 and €150 and Roberto will stop playing loud music
   D. Roberto will pay Thomas €100 and Roberto will stop playing loud music

5. Which of the following statements about price and marginal cost in competitive and monopolized markets is true ?

   A. In competitive markets, price equals marginal cost, in monopolized markets price exceeds marginal cost.
   B. In competitive markets price equals marginal cost, in monopolized markets price equals marginal cost
   C. In competitive markets price exceeds marginal cost, in monopolized markets price exceeds marginal cost
   D. In competitive markets price exceeds marginal cost in monopolized markets price equals marginal cost

6. Concerning the hypothesis that there has occurred a long run deterioration in the developing countries terms of trade empirical studies provide ?

   A. mixed evidence that does not substantiate the deterioration hypothesis
   B. overwhelming support for the deterioration hypothesis
   C. overwhelming opposition to the deterioration hypothesis
   D. None of the above

7. The natural rate hypothesis argues that ?

   A. in the long run the unemployment rate returns to the natural rate, regardless of inflation
   B. Unemployment is always below the natural rate
   C. Unemployment is always above the natural rate
   D. Unemployment is always equal to the natural rate

8. The rational-expectation hypothesis suggests that the forecasts that people make concerning future inflation rates ?

   A. consistently overestimate the actual rate of inflation in the future.
   B. are always correct
   C. consistently underestimate the actual rate of inflation in the future
   D. are correct on average, but are subject to errors that are distributed randomly

9. A production is technique is technically efficient if ?

   A. output is maximized
   B. inputs are minimized
   C. there is no way to make a given output using less of one input and no more of the other inputs
   D. Costs are minimized

10. Even though explicit contracts may lead to layoffs during recessions explicit contracts may still be efficient because such contracts ?

    A. minimize negotiation costs
    B. minimize unemployment effects
    C. guarantee that only the least productive workers will be laid off.
    D. will equitable spread the layoffs among junior and senior workers