Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced.
B. overallocation of resources.
C. an impossible production point.
D. technological advancement.
Answer: A
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Millionaires do not face the problem of scarcity.
Answer the following statement true (T) or false (F)
When interest rates fall, a bank that perfectly hedges its portfolio of Treasury securities in the futures market
A) suffers a loss. B) experiences a gain. C) has no change in its income. D) may either gain, lose or see no change in its income.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The real risk-free interest rate rises, and reserve-related (central bank) transactions become more negative (or less positive). c. The real risk-free interest rate and reserve-related (central bank) transactions remain the same. d. The real risk-free interest rate rises, and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Give an example of a sunk cost and describe how sunk costs should affect future actions.
What will be an ideal response?