Suppose we shopped for a basket of goods in Year 1 and it cost $350 . Suppose the same basket of goods adds up to $385 in Year 2 . If we use Year 1 as a base year, what would be the Year 2 CPI?
a. 35.
b. 90.
c. 100.
d. 110.
e. 135.
d
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Who benefits from the process of financial intermediation?
A) borrowers only B) There is no benefit, because money does not create wealth. C) savers only D) both savers and borrowers
Refer to Table 4-1. The table above lists the highest prices three consumers, Tom, Dick, and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of one of the shirts is $28 dollars
A) Tom will receive $12 of consumer surplus from buying one shirt. B) Harriet will receive $25 of consumer surplus since she will buy no shirts. C) Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts. D) Tom and Dick receive a total of $70 of consumer surplus from buying one shirt each. Harriet will buy no shirts.
For some investors, derivatives can be attractive financial assets to purchase because
A. these assets can be used to offset the possibility of another risk faced by the investor. B. these assets allow an investor to eliminate the risk that they face entirely. C. they provide high returns with a very small investment. D. they are easier to sell than common stock.
Which of the following is not a typical justification for running a budget deficit?
a. financing a war b. dealing with a recession c. fighting inflation d. dealing with unemployment