Users of commodities are:
A. likely to take the short position in a futures contract.
B. usually not participants in futures contracts.
C. buyers of futures.
D. speculators preferring to get the large returns which result from large risk.
Answer: C
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Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result, a. Skippy's demand for peanut butter will increase, but not until the end of the year. b. Skippy's demand for peanut butter increases today
c. Skippy's demand for peanut butter decreases as he considers buying almond butter. d. Skippy's demand for peanut butter shifts left today.
When the Fed unexpectedly decreases the money supply,
a. real interest rates will rise and the foreign exchange value of the dollar will appreciate. b. real interest rates will rise and the foreign exchange value of the dollar will depreciate. c. real interest rates will fall and the foreign exchange value of the dollar will appreciate. d. real interest rates will fall and the foreign exchange value of the dollar will depreciate.
Assuming the economy represented in the graph shown is currently at point B, if the government does nothing, then eventually:
A. SRAS will shift left, and the economy will experience stagflation. B. SRAS will shift to the right, and the economy will have Y3 output with lower prices. C. LRAS will shift left, until lower equilibrium output is reached with lower prices. D. the entire economy will collapse.
A decrease in government spending is one of the options that can be used to pursue a contractionary fiscal policy.
Answer the following statement true (T) or false (F)