In finance and economics the dow theory

Assignment Help Business Economics

Reference no: EM131096780

In finance and economics, the "Dow Theory" is a theory that states the demand for goods should be reflected in the amount of cargo carried by transportation companies and delivered to consumers and businesses. The Dow Jones Transportation Average (DJTA) is an average of the share prices of 20 transportation companies, such as FedEx, Delta Air Lines, Con-Way Trucking, and CSX Rail. All of these transportation companies—airlines, railroads, trucking, delivery—move the nation's goods. Their share prices are an indication of how well their businesses are performing. The Dow Theory implies that a higher DJTA correlates to a greater need for cargo transportation, while a lower DJTA correlates to a lesser need for cargo transportation. In the second week of February 2014, the DJTA decreased 5.9 percent, which was the biggest weekly decline since November 2011. The DJTA is down 1.2 percent year to date, primarily because of lower amounts of goods carried by transportation companies. Suppose that the U.S. economy is at Situation 1. According to the Dow Theory, the recent changes in the DJTA most likely imply that _____. A. U.S. aggregate supply increases the economy from Situation 1 to Situation 2 B. U.S. aggregate supply decreases the economy from Situation 1 to Situation 3 C. U.S. aggregate demand increases the economy from Situation 1 to Situation 2 D. U.S. aggregate demand decreases the economy from Situation 1 to Situation 3

Reference no: EM131096780

Questions Cloud

What is average cost function : Mr. Otto Carr, owner of Otto’s Autos, sells cars. Otto buys autos for $c each and has no other costs. What is his total cost if he sells 10 cars? What if he sells 20 cars? Write down the equation for Otto’s total costs assuming he sells y cars: TC(y)..

Conference on the subject of globalization : Your team attends a trade conference on the subject of globalization. They have attended several seminars both advocating and dismissing implementing a global strategy. You return to the office and share some of what you have learned with the team..

Determine whether the overnight loans rate should be raised : To determine whether the overnight loans rate should be raised, lowered, or left unchanged, the bank of Canada does all of the following except

Deficit outlook darkens : According to the In the News article in the text titled "Deficit Outlook Darkens,"

In finance and economics the dow theory : In finance and economics, the "Dow Theory" is a theory that states the demand for goods should be reflected in the amount of cargo carried by transportation companies and delivered to consumers and businesses. The Dow Jones Transportation Average (DJ..

Initiating the project management intranet : JWD Consulting wrote a business case before officially initiating the project management intranet site project. Review the contents of this document in Table 3-2 (linked at the bottom of the page) and find two academic articles from the CSU-Global..

Portugals internatnioal tourism between the countries : When looking at the US and Portugals internatnioal tourism between the countries, they have the same long term orentation value. How will the affect future international tourism between the countries in the future? what does this mena?

Have you been directly influenced or inspired by faulkner : The North Dakota Ojibwe reservation in your novels has frequently been compared to Faulkner's Yoknapatawpha County for its scope and variety of characters. Have you been directly influenced or inspired by Faulkner?

Specialist in estate planning : You are Midas Investment Services' specialist in estate planning. You give talks to various groups during the year about estate planning. You ask nonprofit groups (churches, etc.) just to reimburse your expenses; you charge for-profit groups a fee..

User Account

All Pages