When All Investors Correctly Interpret and Use Their Own Information,as

question 27

Multiple Choice

When all investors correctly interpret and use their own information,as well as information that can be inferred from market prices or the trades of others,they are said to have:

• A)sensation seeking expectations.
• B)positive expectations.
• C)rational expectations.
• D)confident expectations.

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Definitions:

Legal Structure

The framework within which a business operates, including its designation as a corporation, partnership, sole proprietorship, or other legal entity.

Barrier To Entry

Factors that make it difficult for new competitors to enter a market, such as high start-up costs or regulatory hurdles.

Price-Control Legislation

Laws enacted by a government to regulate the prices charged for goods and services in the market, often to protect consumers.

Invisible Hand Principle

The tendency of market prices to direct individuals pursuing their own interests to engage in activities promoting the economic well-being of society.