Why may some investors prefer forward contracts to futures?
What will be an ideal response?
Forward contracts are more flexible than futures contracts.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Which of the following is NOT an important factor affecting growth in labor productivity?
A) the saving rate B) the speed with which prices fall C) the growth rate of physical capital D) the growth rate of labor productivity
The 1964 tax reform was designed to _____
a. simplify the tax structure b. remove the bias towards consumption in the tax code c. cut marginal tax rates in order to increase aggregate demand d. cut average tax rates in order to decrease aggregate demand
Suppose a firm can estimate its demand with 100 percent accuracy. In this case, the value of the forecast is equal to ________.
A) zero B) the actual profit the firm earns from having the forecast C) the amount of profit the firm would lose from not having the forecast D) infinity