If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange-rate risk by ________ foreign exchange futures ________
A) selling; short
B) buying; long
C) buying; short
D) selling; long
B
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For the perfectly competitive firm, price
A) equals average revenue and marginal revenue. B) equals average total cost. C) changes as output changes. D) depends on the fixed cost for the firm.
Fixed exchange rates serve as a constraint on inflationary government policies
a. True b. False Indicate whether the statement is true or false
In an effort to balance the budget, the government cuts spending rather than increasing taxes. What will happen to the consumption schedule?
a. It will become steeper. b. It will become flatter. c. It will shift upward. d. It will shift downward. e. It will remain the same and move along it.
When market conditions in a competitive industry are such that firms cannot cover their total production costs, then
a. the firms will suffer long-run economic losses. b. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits. c. some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs. d. all firms will go out of business, since consumers will not pay prices that enable firms to cover their total production costs.