A financial contract that obligates one party to exchange a set of payments it owns for another set of payments owned by another party is called a
A) hedge.
B) call option.
C) put option.
D) swap.
D
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Goodland is currently operating at full capacity. The country experienced a sudden boom in economic activity. However, the unemployment rate increased soon afterwards. What is likely to have caused such a phenomenon?
What will be an ideal response?
If the monthly unemployment rate increase mentioned in the Application wound up being a permanent and not temporary change, the best economic decision by the committee would most likely be to
A) decrease the money supply to stimulate the economy. B) not change monetary policy. C) decrease the money supply to slow the economy down. D) increase the money supply to stimulate the economy.
If policymakers set a target for unemployment that is too low because it is less than the natural rate of unemployment, this can set the stage for a higher rate of money growth and
A) cost-push inflation. B) demand-pull inflation. C) cost-pull inflation. D) demand-push inflation.
To maximize expected profit, a perfectly competitive firm with a random marginal cost and random demand should produce at the level that sets ________ equal to ________.
A) price; expected marginal cost B) price; marginal cost C) expected price; marginal cost D) expected price; expected marginal cost