In the graph above, which points reflect an interest parity arbitrage opportunity?
A) point A
B) point B
C) point C
D) points B and C
D
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Which of the following goods is nondiminishable?
A. City street B. National parks C. The use of a lighthouse D. A free concert
A market in which national currencies are traded by households, firms and governments, is referred to as a(n)
A) foreign exchange market. B) fed funds market. C) international reserves market. D) gold certificate market.
Suppose that the normal rate of return in the inkjet printer industry is 10% and the return being earned by firms in this industry equals exactly 5%. Which of the following is likely to follow from this scenario?
A. The normal rate of return will fall to 5% in the long run. B. Firms will want to leave the industry. C. New firms will want to enter the industry. D. Firms will collude to keep competition out.
Which of the following is false?
A. For bond buyers, the higher the yield the better it is for them. B. For bond buyers, the higher the price of the bond the better it is for them. C. For bond buyers, the lower the yield the worse it is for them. D. The term yield on a bond is the same as the term interest rate on a bond.