If you sell twenty-five $100,000 futures contracts to hedge holdings of a Treasury security, the value of the Treasury securities you are holding is
A) $250,000.
B) $1,000,000.
C) $2,500,000.
D) $5,000,000.
C
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Suppose that the bank has the following balance sheet:
Assets Liabilities Reserves $75,000 Deposits $500,000 Loans $430,000 Net worth $5,000 If the required reserve ratio is 10 percent, what is the maximum the bank can loan out? Suppose the bank makes this loan and the borrower spends the money, which is deposited in a different bank. Show the impact of these transactions on the bank's balance sheet.
Statistical evidence suggests that
A) free trade policies promote economic growth more effectively than do import substitution policies. B) import substituting policies tend to promote effective exploitation of scale economies. C) import substitution tends to lead to relatively low effective rates of protection. D) import substitution is to this day the preferred growth strategy promoted by the World Bank. E) import substitution proved to be the most effective aid for developing countries before 1970.
To explain the short-run fluctuations in the real-world economies, economists refer to:
A) The combination of unexpected changes in demand and flexible prices B) The combination of unexpected changes in demand and inflexible prices. C) the combination of fully expected changes in demand and inflexible prices. D) the combination of flexible prices and changes in the inventories
Table 3-2 Combination Cotton Corn A 12 16 B 17 15 C 21 13 D 23 9 E 24 5 ? The concept of opportunity cost can be represented graphically by the
A. area inside the production possibilities frontier. B. slope of the production possibilities frontier. C. vertical distance from the horizontal axis to the production possibilities frontier. D. horizontal distance from the vertical axis to the production possibilities frontier. E. sum of the horizontal and vertical distances to the production possibilities frontier.