Tuesday
Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 26 of 36 Saving, Investment, and the Financial System Section 6 of 25 … After a corporation initially issues stock by selling shares to the public these shares trade on stock exchanges. In these stock exchange transactions of its shares the corporation itself receives no money. The most important stock exchanges in the U.S. economy are · the New York Stock Exchange · the American Stock Exchange · NASDAQ, National Association of Securities Dealers Automated Quotation system Most countries have their own stock exchanges on which the shares of local corporations trade. … The prices at which shares trade on stock exchanges are determined by the supply of and demand for the stock. Because stock represents ownership in a corporation the demand for a stock and thus its price reflects public perception of the corporation's future profitability. When people become optim...