Financial Innovation More and more of the back office tasks for commodity traders and market makers can be easily automated which lowers the costs of making transactions. What is the effect of these technical changes on the bid-ask spreads between commodity buyers and sellers at commodity exchanges?
The cost of making a market falls. This means a market maker can complete a transaction at lower cost making an existing spread more profitable. He can increase the number of transactions he completes by lowering the spread. Moreover, if he does not lower the spread, traders may seek out a different market maker offering better terms. Therefore, the bid-ask spread within the market will succumb to price pressure and shift lower.
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Here is what we know about a household: wages $25,000, unemployment insurance benefits $3,000, dividend income $4,000, income tax $5,000. What is the contribution to GDP of this household following the expenditure approach?
A) $24,000 B) $25,000 C) $28,000 D) $29,000
If the population of Country A has a higher percentage of retirees than the population of Country B, then:
a. the demand for loanable funds in Country A would be higher than the supply of loanable funds in Country B. b. the demand for loanable funds in Country A would be higher than the supply of loanable funds in Country A. c. the supply of loanable funds in Country A would be higher than the supply of loanable funds in Country B. d. the supply of loanable funds in Country A would be lower than the supply of loanable funds in Country B.
State the case for and the case against currency bailouts.
What will be an ideal response?
If you were a liberal member of Congress during a time of unemployment, which fiscal policy would be most appealing to you?
A. decrease government spending B. increase government spending C. decrease taxes D. increase taxes