The bid-ask spread:
a. Shows the relative value of two currencies.
b. Shows the relative value of three or more currencies.
c. Is determined by the government.
d. Is usually zero due to efficient markets.
e. Represents the profit margin of the financial institution.
.E
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Anna Arbor typically earns $40,000 per year and has an MPC equal to 0.90, but wins $100,000 in the lottery in 2001 . Her consumption for 2001, according to Milton Friedman, will be
a. $100,000 b. $64,000 c. $36,000 d. $116,000 e. $16,000
As hourly wages have risen in the United States in the twentieth century, the number of hours of labor supplied by most wage workers has
a. fallen. b. stayed roughly constant. c. risen. d. generally risen, but has fallen during periods of recession.
When a monopolist increases the number of units it sells, there are two effects on revenue. They are the
a. demand effect and the supply effect. b. competition effect and the cost effect. c. competitive effect and the monopoly effect. d. output effect and the price effect.
The Federal Reserve cannot affect the price level directly; therefore, the Fed typically uses the following as its policy target:
A. Interest rates B. Government expenditures C. Inflation