The credit derivative that, for a fee, gives the purchaser the right to receive profits that are tied either to the price of an underlying security or to an interest rate is called a
A) credit option.
B) credit swap.
C) credit-linked note.
D) credit default swap.
A
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Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. The GDP Price Index rises, and nominal value of the domestic currency rises. c. The GDP Price Index falls, and nominal value of the domestic currency rises. d. The GDP Price Index rises, and nominal value of the domestic currency remains the same. e. The GDP Price Index rises, and nominal value of the domestic currency falls.
Which of the following is not correct?
a. The economy contains many labor markets for different types of workers. b. The impact of the minimum wage depends on the skill and experience of the worker. c. The minimum wage is binding for workers with high skills and much experience. d. The minimum wage is not binding when the equilibrium wage is above the minimum wage.
When the economy enters an expansion of a business cycle, households become more optimistic about expected future disposable income. The increase in optimism leads to
A) a shift upward of the consumption function. B) a movement downward along the consumption function. C) no change in the level of consumption expenditures. D) an increase in consumption expenditures. E) a movement upward along the consumption function.
A market is initially in a long-run equilibrium and there is a permanent increase in demand. After the new long-run equilibrium is reached, there
A) are more firms in the market. B) are fewer firms in the market. C) are the same number of firms in the market. D) probably is a different number of firms in the market, but more information is needed to determine if the number of firms rises, falls, or perhaps does not change. E) is no change in the market.