An exchange rate crisis is when:
a. the currency is stable.
b. the value of a currency declines dramatically.
c. the value of a currency increases dramatically.
d. a country fixes the price of its currency.
Ans: b. the value of a currency declines dramatically.
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Underwriting spreads on equity issues are much __________ than on debt issues because stock prices are so __________ relative to bond prices
A) smaller; steady B) smaller; volatile C) larger; steady D) larger; volatile
The labor force is
A) the sum of the employed and unemployed workers in an economy. B) the total number of people in an economy who are over the age of 16. C) the total number of employed people in an economy. D) the percentage of employed people divided by the population.
An absolute poverty line is usually set based on:
A. the cost of certain essential goods. B. a certain percentage below the average income in a society. C. the lowest quartile of income earners in a society. D. the lowest 1 percent of all income earners in a society.
Assume that the farmers know that their revenues would increase if each would take a certain amount of acreage out of production. An agreement to do so
A) would not be made because the farmers have no incentive to enter into it. B) would not be made because it would contradict the assumption that farmers are profit maximizers. C) probably would not be adhered to, if made, because it would be disadvantageous for the farmers as a group. D) probably would not last, if made, because each farmer would have an incentive to break it.