Which of the following factors would tend to increase the size of the premium on an options contract?
A) The option is near its expiration date.
B) The current default-risk-free interest rate is high.
C) The price volatility of the underlying asset is low.
D) The option is far away from its expiration date.
D
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Keynes and his followers believed that
A) the economy could not operate at any level of real Gross Domestic Product (GDP) less than full capacity. B) capitalism was one economic system that guaranteed full employment. C) wages and prices in the short run were flexible. D) there was no guarantee that a capitalist economy would reach a full employment equilibrium.
In the above figure, the short-run aggregate supply curve is SAS1. If technology advances, there is
A) an upward movement along SAS1. B) a downward movement along SAS1. C) a shift to SAS0. D) a shift to SAS2.
The law of one price does not hold for
A) agricultural goods. B) tradeable goods. C) differentiated goods. D) goods whose production causes pollution.
Which of the following is not associated with more inelastic demand?
a. a limited amount of time for consumers to respond to a price change b. availability of many close substitutes c. large percentage of income spent on the good in question d. Neither b. or c. is associated with more inelastic demand