An Uncanny Truth in the U

question 64

True/False

An uncanny truth in the U.S.equity market is that over time the price-earnings multiple has been almost constant,ranging fewer than two points up or down from the average over the past 130 years.

Recognize the implications of surplus and shortage on market conditions and how they adjust to reach equilibrium.

Explain the concepts of usury laws and their impact on interest rates.

Know the relationship between price and quantity demanded or supplied and the economic laws governing them.

Understand the characteristics and types of corporations.

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Definitions:

Functional Fixedness

A cognitive bias that limits a person to use an object only in the way it is traditionally used, which can inhibit problem-solving and creativity.

Makeshift Nutcracker

An improvised tool or device used to crack nuts, fashioned from materials at hand when a traditional nutcracker is not available.

Analogy Problem

A type of problem that tests reasoning and understanding through the identification of relationships between pairs of concepts.

Series-Completion

A cognitive task where individuals must identify the missing part in a sequential pattern.