When government policy moves the price in a manner that encourages investors to take risks, the price: is a multiple of the fair market value. 4 is a valid indicator of risk and encourages prudent behavior. provides a distorted price signal. O cannot be in equilibrium.

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter18: Auctions
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When government policy moves the price in a manner that encourages investors to take risks, the price:
is a multiple of the fair market value.
is a valid indicator of risk and encourages prudent behavior.
provides a distorted price signal.
cannot be in equilibrium.
Transcribed Image Text:When government policy moves the price in a manner that encourages investors to take risks, the price: is a multiple of the fair market value. is a valid indicator of risk and encourages prudent behavior. provides a distorted price signal. cannot be in equilibrium.
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