Hedging is possible only when investments have:
A. the same risk premiums.
B. payoffs that are independent of each other.
C. opposite payoff patterns.
D. the same payoff patterns.
Answer: C
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The adoption of inflation targeting in the United States ________
A) brought an end to the "dual mandate" regime B) resulted from legislation enacted in 1914 C) occurred after its adoption in more than a dozen other countries D) was blocked by its staunch opponent, Ben Bernanke
The minimum value of the Herfindahl-Hirschman Index (HHI) is ________ and the maximum value is ________.
A) 0; 10,000 B) 100; 1,000 C) 100; 10,000 D) 1; 1,000
The theory of comparative advantage suggests that nations should produce a good if they:
a. have the lowest opportunity cost. b. have the lowest wages. c. have the most resources. d. can produce more of the good than any other nation.
A profit-maximizing firm will shut down in the short run when
a. price is less than average variable cost. b. price is less than average total cost. c. average revenue is greater than marginal cost. d. average revenue is greater than average fixed cost.