What is an advantage of using options instead of forward contracts when speculating on exchange rates?
What will be an ideal response?
If the value of the currency moves in the opposite direction to the one the speculator hopes, the speculator with an options contract doesn't have to exercise the option.
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Refer to the following graphs to answer the question below.
In which graph would the indicated shifts cause equilibrium quantity to definitely rise, but the effect on price is indeterminate?
A. graph (1) B. graph (2) C. graph (3) D. graph (4)
Keeping total factor productivity constant, as the capital-labor ratio increases, labor productivity
A) increases at a constant rate. B) increases at an increasing rate. C) increases at a decreasing rate. D) does not change.
If a person buries his money in his backyard, he is using money as a medium of exchange
a. True b. False Indicate whether the statement is true or false
Which of the following is true for a price-searcher firm?
a. Its marginal revenue curve will lie below its demand curve. b. Its marginal revenue curve will lie above its demand curve. c. Its marginal revenue curve is equal to its demand curve. d. Its marginal revenue curve is horizontal at the market equilibrium price.