When do financial options prove to be beneficial?
Financial options are assets that give holders the right, but not the obligation, to make certain transactions at pre-specified strike prices. They have become valuable tools for risk management, particularly in the years since option pricing models were developed.
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
If the Fed wants to temporarily inject reserves into the banking system, it will engage in
A) a repurchase agreement. B) a matched sale-purchase transaction. C) a reverse repurchase agreement. D) an open market sale.
The assumption(s) made to construct a kinked-demand oligopoly model is (are) that:
a. all firms in the industry will ignore the price changes made by any one firm. b. any price decrease will be ignored, but price increases will be followed. c. all firms will follow a price decrease but will ignore any price increase. d. all price changes made by any firm will be followed by all of the other firms. e. price can go up, but it cannot go down.
Gross domestic product is the money value of manufacturing production in a year
a. True b. False Indicate whether the statement is true or false