The corn basis in Nevada is about -$0.30/bu. The corn basis in Gilbert is about -$0.20/bu. Where should a corn farmer living in Ames, halfway between Nevada and Gilbert, ship his corn to make the most money?
A. Nevada.
B. Gilbert.
C. They both give the same return to the farmer if transportation to each destination costs the same.
D. None of the above.
Answer: B. Gilbert.
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Ceteris paribus, a rise in interest rates in the United States will cause the yen price of the dollar in international exchange markets to ________. I.e., the dollar ________ in value against the yen
A) decrease; depreciates B) increase; depreciates C) increase; appreciates D) decrease; appreciates
When economists and government officials speak about the money supply, they usually mean M2
a. True b. False
The AS/AD model implies that monetary policy should be used to:
A. keep the price level constant. B. keep the money supply growing at a constant rate. C. keep the interest rate constant. D. make adjustments so that savings equal investment.
Which of the following is NOT related to the government's political function of income redistribution?
A) providing money transfer payments B) excise tax on cigarettes C) Social Security D) in-kind transfers