Which of the following features would characterize a good monetary policy instrument?
A. Tightly linked to monetary policy objectives.
B. Controllable and rigid.
C. Observable only to monetary policy officials.
D. Difficult to change.
Answer: A
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Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result,
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of DVD players will increase; the equilibrium quantity may increase or decrease.
When drawn against the real interest rate, the optimal investment schedule shifts to the right if the
A) current capital stock K increases. B) current capital stock K decreases. C) future capital stock K' increases. D) future capital stock K' increases.
If farm price supports gave farmers 60 percent parity in 1975, then we know that
a. farm purchasing power was 60 percent higher in 1975 than in 1910–1914 b. farm purchasing power was 60 percent lower in 1975 than in 1910–1914 c. farmers were better off in 1975 than in 1910–1914 d. farm prices in 1975 purchased 160 percent of what they purchased in 1910–1914 e. the purchasing power of a unit of farm goods in 1975 was 60 percent of the purchasing power it had in 1910–1914
Assume you pay a premium of $0.50/bu for a put option with a strike price of $4.00/bu and that the current futures price is $3.75/bu. Then, the option is:
A. In-the-money B. At-the-money C. Out-of-the-money D. None of the above