Derivatives can be used to reduce risk, but they also can be a source of risk in themselves.
Answer the following statement true (T) or false (F)
True
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If workers and firms expect that inflation will be 5 percent next year, and real wages are not changing over time, by how much will nominal wages increase?
A) less than 5 percent B) more than 5 percent C) 5 percent D) depends on actual inflation for next year
Which of the following situations is used as a justification for government?
A. negative externalities B. removal from the prisoner's dilemma C. nonexcludable goods D. positive externalities E. all of the above
The primary mission of the World Bank today is to
A) provide capital to underdeveloped countries. B) provide capital to firms around the world. C) provide financial assistance for the reconstruction of war-damaged nations. D) provide a safe place for people around the world to put their money. E) help countries manage their exchange rates.
Suppose a market basket of goods and services costs $1,000 in the base year and the consumer price index (CPI) is currently 110. This indicates the price of the market basket of goods and services is now:
A. $110. B. $1,000. C. $1,100. D. $1,225.