In order to reduce market risk associated with bonds held in inventory, a dealer can
A) take a long position in bond futures.
B) take a short position in bond futures.
C) purchase bonds at the mark-to-market settlement price.
D) use settlement by offset procedures.
B
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Use the following table to illustrate the importance of macroeconomic policy coordination
Show that the two governments would have been happier if the two of them had adopted looser monetary policies, but given the policies that the other government did adopt, it is not in the interest of any individual government to change its course. Assume that each country wishes to get the biggest reduction in inflation rate at the lowest cost in terms of unemployment. This means that each country maximizes-??/?U, the inflation reduction per point of increased unemployment.
If something is a unit of account, then it:
a. serves as a yardstick for measuring the relative value of other goods b. is a means of holding wealth for the future c. is fairly stable d. is durable and portable e. is accepted as payment for any purchase
When the dollar appreciates, the cost to Americans of foreign goods
a. rises and the CPI falls. b. rises and the CPI rises. c. falls and the CPI rises. d. falls and the CPI falls.
Under a gold standard, if the market price of gold is below the official price of gold (set by the monetary authority) members of the public would likely buy gold _______________ and sell it __________________, causing the market price of gold to ____________________
A) from the monetary authority; in the gold market; fall B) from the monetary authority; in the gold market; rise C) in the gold market; to the monetary authority; fall D) in the gold market; to the monetary authority; rise