Which of the Following Statements About the Put/call Ratio Is

question 9

Multiple Choice

Which of the following statements about the put/call ratio is most accurate?

• A) A negative ratio is bullish.
• B) Investors interpret a ratio greater than 1 to be a bearish indicator.
• C) Investors interpret a relatively low ratio to be a bearish indicator.
• D) Investors interpret a relatively high ratio to be a bearish indicator.

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Definitions:

Automatic Stabilizer

Economic policies and programs, such as unemployment benefits and taxation, that automatically adjust to counteract economic fluctuations without direct intervention by policymakers.

Crowding-out

A situation where increased public sector spending leads to a reduction in private sector spending.

Accelerator Effect

Refers to the phenomenon where an increase in national income results in a proportionally larger increase in investment spending due to expected higher demand for products.

Aggregate Demand

The sum of all demands for products and services in an economy, set at a particular price level and time period.