Showing up to a job interview and not knowing any information about the company is an example of a:
A. negative screen.
B. positive screen.
C. positive signal.
D. negative signal.
Answer: D
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A curve that shows all the combinations of two inputs, such as labor and capital, that will produce the same level of output is called
A) a budget line. B) an isocost line C) an isoquant. D) an optimal input combination curve.
Economists generally believe that
a. buyers and sellers have all the information they can use b. additional information is costly to acquire c. decision makers have complete knowledge of all the alternatives available d. economic decisions result from random behavior e. decision makers never make mistakes
A macroeconomist — as opposed to a microeconomist — might study the effect of
a. changes in the money supply on the inflation rate. b. an increase in the gas tax on fuel consumption. c. a technological advance on the natural gas industry. d. a hurricane on prices in the orange industry.
Assume that the current spot exchange rate is $1.98/£, that the three-month forward exchange rate is $2.00/£, and that a speculator believes that the spot rate in three months will be $2.05/£. How can this person speculate in the forward market? Also assume that the speculator is willing to take a position of about $20 million or £10 million. How much will the speculator earn if he or she is correct?
What will be an ideal response?