If More People Think a Corporation's Stock Is Overvalued Than

question 5

Multiple Choice

If more people think a corporation's stock is overvalued than think it is undervalued then there is a

• A)surplus,so its price will rise.
• B)surplus,so its price will fall.
• C)shortage,so its price will rise.
• D)shortage,so its price will fall.

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Definitions:

Payroll Tax

Taxes imposed on employers or employees, often calculated as a percentage of the salaries that employers pay their staff, funding social security and healthcare programs.

Social Security Tax

A charge imposed on both workers and their employers to finance the Social Security system, offering financial support to retirees, individuals with disabilities, and children of workers who have passed away.

Income Tax Decrease

A reduction in the rate at which individuals or corporations are taxed on their income, potentially leading to increased disposable income and consumption.

Federal Deficit

The amount by which a government's expenditures exceed its tax revenues.