Refer to the table below. If these are the only four price options for a pound of sugar, what is the value of A?
The above table provides the possible prices for a pound of sugar next year along with the associated probabilities (in percent).
A) 0.45
B) 1.00
C) 0.10
D) 0.25
C) 0.10
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If a certain automotive part can be purchased in Mexico for 60 pesos or in the United States for $6.25 and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:
A. is less expensive in Mexico. B. costs the same in Mexico and the United States. C. is more expensive in the United States. D. is less expensive in the United States.
When the central bank sells $1,000,000 worth of government bonds to the public, the money supply:
A. increases by $1,000,000. B. decreases by $1,000,000. C. decreases by more than $1,000,000. D. decreases by less than $1,000,000.
The passive approach to resolve a contractionary gap results in a decrease in the price level, and the active approach to resolve a contractionary gap results in an increase in the price level
Indicate whether the statement is true or false
Which of the following examples has the highest opportunity cost?
a. When interest rates are at 10 percent, Krisjan places all of his wages into a checking account. b. Katrin considers placing money in a Treasury Bill with interest of 7 percent, but decides against it. c. Gunnar decides not to invest in a CD that has an interest rate of 5 percent. d. When interest rates are at 3 percent, Freyja decides to use her money for everyday expenses.