Suppose $1 = 1.5 euros in London and $1 = 1.2 euros in New York. Which of the following would be the right trade for you to make money?
a. You sell 1,000 euros in London and buy euros in New York.
b. You sell dollars in New York and buy dollars in London.
c. You sell dollars in London and buy dollars in New York.
d. You sell euros in London and buy dollars in New York.
Ans: c. You sell dollars in London and buy dollars in New York.
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According to the interest-rate-based perspective on the monetary policy transmission mechanism
A) changes in the money supply have little influence on macroeconomic variables. B) key channels of monetary policy indirectly ultimately relate money supply changes to total planned spending through indirect effects on planned investment. C) inflation is always caused by excessive monetary growth and changes in the money supply offset aggregate demand only directly. D) monetary policy leads to increases in the price level but will have no effect on the rate of output.
Suppose you run a charity that raises money for a worthy public good. Your donors may be concerned about how much of each dollar that is raised is put back into more fund-raising. a. Suppose the marginal product of a dollar put into fundraising is initially increasing but eventually diminishing. How much will the last dollar spend on fundraising raise?
b. If everyone considers their own contribution to this charity as the marginal contribution, what will be their impression of how much they are really helping the public good? c. Would you expect your answer to (b) to make it harder for you to raise money for your charity? d. How might your answer to (c) explain why some charities make a point of informing people that they have placed a cap on their fund raising budget -- or that they have placed a cap on how many people will be approached during the fund raising campaign? What will be an ideal response?
According to Kenneth J. Arrow, what are the three conditions that any reasonable voting scheme should satisfy? What does Arrow's Impossibility Theorem state?
What will be an ideal response?
For a steel manufacturing firm, overhead costs would include:
a. cost of iron ore. b. cost incurred in buying blast furnaces. c. insurance premiums of the firm. d. wages of the workers. e. cost of electricity for running the machines in the factory.