A potato farmer who signs a futures contract is
A) speculating on the future price of potatoes, hoping it will be higher.
B) speculating on the future price of potatoes, hoping it will be lower.
C) eliminating his exposure to risk from a falling potato price.
D) trying to influence the price of potatoes to rise.
C
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GDP equals
A) aggregate expenditure. B) aggregate income. C) the value of the aggregate production in a country during a given time period. D) all of the above.
Which of the following has been confirmed by empirical tests of the Ricardian model?
A) All predictions of the model for a multi-product, multi-country world are highly unrealistic. B) The existence of nontraded goods results in a high degree of specialization among countries. C) International trade has no impact on income distribution. D) The unimportance of economies of scale as a cause of trade. E) Companies tend to export goods in which they have a relatively high level of productivity.
When firms participate in group health insurance for all employees, it
A) raises rates for everyone, because it brings unhealthy people into the pool. B) raises rates for unhealthy people. C) may lower rates for all people to the extent that it keeps healthy people in the pool. D) prevents unhealthy people from "selecting out," to the detriment of healthy people. E) increases the amount of information available to insurers about the population.
The following situation is an example of an export promotion strategy. Guatemala has a comparative advantage in the production of bananas and, as a result, the Guatemalan government grants incentives to banana growers to improve their performance in the international marketplace.
Answer the following statement true (T) or false (F)