6. The theory of asset demand suggests that the most important factor affecting the demand for domestic and foreign assets is

)
) If you default on your auto loan, your car will be repossessed
because it has been pledged as ________ for the loan.

One
purpose of regulation of financial markets is to

With
regard to external sources of financing for nonfinancial businesses
in the United States, which
of the following are accurate statements?

Of
the following sources of external finance for American nonfinancial
businesses, the least important is

A
situation when an asset price differs from its fundamental value is  


A)

According
to the efficient markets hypothesis, purchasing the reports of
financial analysts

________
occurs when market participants observe returns on a security that
are larger than  


what
is justified by the characteristics of that security and take action
to quickly eliminate the  


unexploited
profit opportunity.

Rational
expectations forecast errors will on average be ________ and
therefore ________ be  


predicted
ahead of time.

If
during the past decade the average rate of monetary growth has been
5% and the average  


inflation
rate has been 5%, everything else held constant, when the Federal
Reserve announces  
that
the new rate of monetary growth will be 10%, the adaptive expectation
forecast of the  
inflation
rate is

Economists
have focused more attention on the formation of expectations in
recent years. This  


increase
in interest can probably best be explained by the recognition that