Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . If Samantha is offered a full coverage insurance policy for her house at $2000, would she buy the insurance?
a. Yes because she gets to now enjoy her wealth risk-free
b. No, because she can take the risk and be better off
c. Yes, because she gains on average with the insurance
d. Both A&C
d
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A country's balance of payments accounts records
A) only the goods and services purchases among countries over a period of time. B) the international trading, borrowing, and lending positions of a country over a period of time. C) the flow of human and non-human capital among countries over a period of time. D) only official transactions between governments over a period of time.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index falls, and reserve-related (central bank)transactions remain the same. c. The GDP Price Index and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The Dominican Republic has a comparative advantage in the production of tobacco, and Panama has a comparative advantage in the production of oranges. If both countries specialize based on the theory of comparative advantage
A. only the production of both goods will increase. B. only the consumption of both goods will increase. C. only the production of tobacco will increase. D. the production and consumption of both goods will increase.
Refer to the data. In determining real GDP, the nominal GDP for:
Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are as follows. Answer the question on the basis of these data.
A. each year must be multiplied by the relevant price index.
B. years 1 and 2 must be inflated.
C. years 4 and 5 must be inflated.
D. years 1 and 2 must be deflated.