In perfect competition, which is NOT true?
A. Both concentration ratios and Rothschild indexes tend to be close to zero.
B. At least one firm has a perceptible impact on the market price.
C. There are a large number of firms, and each is small relative to the entire market.
D. Firms produce homogeneous goods.
Answer: B
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A call option is said to be "in the money" if
A) it is written on a Treasury bill or other money-market asset. B) it has increased in price since it was first written. C) the price of the underlying asset is currently greater than the strike price. D) the price of the underlying asset is currently greater than the strike price plus the option premium.
If India has an absolute advantage in rug production compared to England, then
a. India should export rugs to England b. England should export rugs to India c. England cannot benefit from free trade with India d. England uses fewer resources to produce rugs than India e. India uses fewer resources to produce rugs than England
According to adaptive expectations theory, expansionary monetary and fiscal policies to reduce the unemployment rate are
A) useless in the short run
B) useless in the long run
C) ineffective on the price level
D) none of the above
A sign that Country A is under pressure to devalue its currency is its:
a. Current account is in deficit. b. Overall balance is in surplus. c. Reserves account is in deficit (i.e., negative). d. Overall balance is in deficit.