Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called
A) differential actions.
B) cash transactions.
C) arbitrage.
D) forward transactions.
C
You might also like to view...
If e = 0.10, c = 0.20, and H = 440, the money supply at full multiplier expansion is
A) 4400. B) 1467. C) 1760. D) 1907. E) 1173.
If a $1,000 increase in income leads to an $800 increase in consumption expenditures, then the marginal propensity to consume is
a. 0.2 and the multiplier is 1.25. b. 0.8 and the multiplier is 5. c. 0.2 and the multiplier is 1.25. d. 0.8 and the multiplier is 8.
Based on the model of the money market, if the Federal Reserve increases the reserve requirement, the equilibrium interest rate should:
A. stay the same. B. increase. C. decrease. D. increase to the same extent that the demand for money increases.
When a tariff is imposed, the demand curve for the domestic good
A) shifts downward and to the right. B) shifts upward and to the left. C) shifts upward and to the right. D) shifts downward and to the left.