Which of the Following Is a TRUE Statement About Stock

question 358

Multiple Choice

Which of the following is a TRUE statement about stock markets?

• A) Economists can make above-average profits in the stock market because of their specialized knowledge of economics.
• B) It is always better to buy growth stocks than the older and more stable blue-chip stocks.
• C) The stock market on average over time is random and totally unrelated to the performance of the economy.
• D) It is illegal for a friend of a corporate executive to make large profits in the stock market by using his inside information.

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Definitions:

Surplus

Situation in which the quantity supplied exceeds the quantity demanded.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where supply equals demand.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a specific price over a given period of time.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price within a specific time period.