If Maria changes the prices of her products because she anticipates a change in government economic policies, her behaviour exemplifies ______.
a. a sacrifice ratio
b. gradualism
c. indexing
d. rational expectations theory
d. rational expectations theory
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The difference between the spot contract and a forward contract is that:
a. the former is a flexible price on the currency, and the latter is a fixed price. b. the former is a contract to be settled immediately, and the latter is a contract to be settled at a future agreed-upon date. c. the former is a derivative, and the latter is not a derivative. d. the former has a fixed price but the contract can be settled at a later date, and the latter is a contract to be settled immediately.
Amy can study for an hour or spend that hour sleeping or going out for dinner. If she decides to study for the hour, the opportunity cost of the hour spent studying is
A. definitely going to sleep. B. studying, since this is the choice she opted for. C. sleeping or going out for dinner, whichever she would have preferred the most. D. sleeping and going out for dinner. E. definitely going out to dinner because she must eat at some time.
Professor Jeremy Siegel, of the University of Pennsylvania, did research showing that:
A. bonds really are less risky to hold over the long term. B. owning stocks over the long run produces returns below the risk-free return. C. the return on the S&P 500 for a 25-year period often produces returns below zero. D. if an investor owns stocks for a very short time the risk is greater than if the stocks are held for a long time.
Voluntary export restraints (VER):
A. have the same effect as an import ban. B. are illegal under the international trading rules. C. violate the spirit of international trade agreements. D. All of these.