Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 2

"Listen," your buddy says. "Have you ever noticed that you can get the same type and size of tire for $30 cheaper in the next county over? I've got a way to make profits for years-we'll buy the tires where they're cheaper and bring them back here to sell." What is the term for the transaction your friend wants to make? Would the efficientmarket hypothesis predict it will be as profitable as he says? Explain.