Question

Why is describing trends in the stock market (broadly defined) important for describing the national economy...

Why is describing trends in the stock market (broadly defined) important for describing the national economy in a market analysis?

The stock market is the single biggest competitor for real estate investment, when stocks are falling in value real estate will rise.

The stock market is a leading indicator suggesting people believe firms will be more profitable in the future.

The stock market mirrors real estate prices in large cities, but is not representative of smaller municipalities or rural areas.

The stock market is not important in describing the national economy because only local factors matter for real estate markets.

An alternative policy to Rent Control is to offer rental vouchers. These are payment made to landlords on behalf of tenants to supplement monthly rent. What does a standard markets model predict this policy will do?

Increase Rents, and Reduce the number of units supplied.

Decrease Rents, and Increase the number of units supplied.

Increase Rents, and Increase the number of units supplied.

Decrease Rents, and Reduce the number of units supplied.

None of the above.

Homework Answers

Answer #1

1 ans ) B) the stock market is a leading indicator suggesting people believe firms will be more profitable in the future.

Explanation: Long term funds will be raised for corporations with the help of stock market.It is a leading indicator for economy.Firms will be profitable with stock markets.

2 ans ) B) decrease rents,increase in number of units supplied

Explanation:In standard market model if there is decrease in price then quantity demanded will increase.If the rent decreases then  number of units supplied will increase.

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