As the Price of a Resource Decreases

question 85

Multiple Choice

As the price of a resource decreases,

• A) demand for that resource increases.
• B) the quantity demanded of that resource decreases.
• C) the supply of that resource increases.
• D) producers are more willing and able to hire that resource.
• E) producers are less willing and able to hire that resource.

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Definitions:

Fama and French

Two economists known for their research on the factors that influence stock returns, notably the three-factor model which includes market risk, size, and value factors in explaining stock returns.

Multifactor Model

A financial model that evaluates securities by considering multiple economic and financial factors to explain asset prices and predict investment returns.

Market Index

A statistical measure that tracks the performance of a specific basket of stocks representing a particular market or sector.

Arbitrage Opportunity

The chance to buy an asset at a low price in one market and simultaneously sell it at a higher price in another market to make a risk-free profit.