Why is a futures contract considered valuable by both producers and consumers?
The futures contract is valuable to both producers and large consumers because it acts as a hedge which lessens the risk associated with the volatile spot prices.
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An assumption of classical growth theory is that when ________ the population growth rate ________
A) real GDP per person exceeds the subsistence level; increases B) people become more skilled; decreases C) the real wage rate falls; increases D) saving declines; decreases
How the price of a depletable resource changes over time depends on
a. how the technology of resource extraction changes. b. the interest rate. c. how the technologies of production change in firms that use the resource. d. All of the above are correct.
Which of the following features does a free-trade area necessarily have?
A. Absence of trade barriers among the member nations B. Harmonization of all economic policies C. Free movement of factors of production across the member nations D. Equal tariff rates
When the Motor Carrier Act of 1980 was made into law, new firms entered into the trucking industry. This action by new trucking firms confirms that:
A. the trucking industry was earning profits in the long run prior to the entry of the new firms. B. the trucking industry was earning losses in the long run prior to the entry of the new firms. C. the trucking industry was earning profits as a result of the entry of the new firms. D. the trucking industry was earning losses before and after the entry of the new firms.