TRUE AND FALSE 15. Risk-averse persons will take no risks. 16. As the interest r
ID: 1103989 • Letter: T
Question
TRUE AND FALSE
15. Risk-averse persons will take no risks. 16. As the interest rate increases, the present value of future sums decreases, so firms will find fewer investment projects profitable. 17. According to the efficient markets hypothesis, stocks follow a random walk so that stocks that increase in price one year are more likely to increase than decrease in the next year. 18. The unemployment rate never falls to zero 19·The introduction of a union into a firm benefits all of that firm's workers. 20. Minimum-wage laws matter most for the least skilled and least experienced members of the labor force, such as teenagers.Explanation / Answer
15. This is False. This depends on Jensens Inequality.
16. This is False. Depends on the structure of cash flows.
17. This is False.
18. This is True. The natural rate of unemployment always remains.
19. This is False.
20. This is True.
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