Jewelers are willing to hold large inventories of diamonds
a. because the demand for diamonds is large and growing
b. because that minimizes the fixed cost of producing diamond jewelry
c. because, given monopoly control of the market for diamonds, they are confident that the price of diamonds will not plummet rapidly
d. because, given monopoly control of the market for diamonds, they are confident that the price of diamonds will rise rapidly
e. because that is what their customers expect them to do
C
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If inflation is anticipated, some effects of inflation on the redistribution of income can be avoided
Indicate whether the statement is true or false
Forward contracts
A) are highly liquid. B) entail small information costs. C) provide little risk sharing. D) are subject to default risk.
Transfer payments, like Social Security, are known as entitlements since ________
A) they are locked up by earlier legislation B) the individuals who receive these payments are poor and deserve our support C) the individuals who receive these payments made payments to the federal government in excess of the monies they draw from the system D) these monies tend to rise in an economic downturn
In the later part of the twentieth century, the price of crude oil began to increase after decades of relatively steady prices, which of the following could explain this phenomenon?
A) Worldwide reserves have been increasing. B) Worldwide demand has been increasing. C) Global warming D) Extraction technology has been degrading.