Which of the following is when an investment bank purchases securities outright in case it misjudged the state of the market and it may have to sell the securities at a lower price than what was guaranteed?
A) credit risk
B) liquidity risk
C) principal risk
D) default risk
C
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Refer to Figure 13-2. Ceteris paribus, a decrease in the price level would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
Based on your understanding of your roommate's preferences, you predict that he will select the spaghetti for his lunch at the cafeteria, but instead he chooses the gyros. How do you describe this event in terms of economic theory?
A) Your roommate is irrational. B) Your roommate does not know what is in his own best interests. C) You roommate does not know his own preferences as well as you do. D) You constructed a model that made a prediction, and the prediction was refuted.
Refer to the above figure. A unit tax has been placed on the good. The producer pays what amount of the tax?
A) none of the tax B) P2 - P0 C) P2 - P1 D) P1 - P0
The policy mix that the Clinton administration sought in early 1993 was a
a. smaller budget deficit and tighter monetary policy. b. smaller budget deficit and looser monetary policy. c. larger budget deficit and looser monetary policy. d. larger budget deficit and tighter monetary policy.