The Weather Report Says That a Devastating and Unexpected Freeze

question 58

Multiple Choice

The weather report says that a devastating and unexpected freeze is expected to hit Florida tonight, during the peak of the citrus harvest.In an efficient market one would expect the price of Florida Orange's stock to

• A)drop immediately.
• B)remain unchanged.
• C)increase immediately.
• D)gradually decline for the next several weeks.
• E)gradually increase for the next several weeks.

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Definitions:

Disposable Income

The money households have for spending and saving after subtracting income taxes.

Disposable Income

The amount of income left for spending or saving after taxes have been paid.

C + I

Represents the sum of consumer spending (C) and investment spending (I) in an economy's GDP formula.

Capacity Utilization Rate

A metric used to measure the degree to which a firm or economy is operating at its full potential or maximum efficiency.