When two goods are perfect complements, the indifference curve is
a. a horizontal straight line.
b. bowed outward.
c. a downward-sloping straight line.
d. a right angle.
d
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Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point c?
A) a decrease in income B) an increase in the relative price of a soft drink C) a decrease in the relative price of a soft drink D) a decrease in the price of bottled water
According to the quantity theory of money, a 15 percent increase in the quantity of money creates a 15 percent rise in
A) the price level. B) the velocity of circulation. C) real GDP. D) the unemployment rate.
Which of the following is an advantage of hedging with options instead of forward contracts?
A) Options prices tend to be lower than forward prices. B) If the price moves in the opposite direction to the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option. C) If the price moves in the direction of the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option. D) Options allow investors to purchase a forward contract at a later date.
An accountant may amortize the expense of a durable good by dividing the total amount spent on the good by the number of years the good is expected to last
An economist may amortize the expense of a durable and never fully account for the total expense. Indicate whether the statement is true or false