Responses to Changes in Demand Conditions: Interest-rate volatility:
What will be an ideal response?
Ans: Adjustable-rate mortgages, Financial Derivatives
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Suppose a 25% off sale on post-holiday merchandise creates a 50% increase in post-holiday sales. The price elasticity of demand is:
A) 2.0. B) .75. C) .50. D) .25. E) none of the above.
The endowment effect is reflected by indifference curves that are:
A. concave to the origin. B. convex to the origin. C. straight lines. D. kinked.
Wealthy consumers do not have to make decisions on what to buy or how much to save
a. True b. False Indicate whether the statement is true or false
If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then
a. U.S. exports and U.S imports increase. b. U.S. exports but not U.S. imports increase. c. U.S. imports but not U.S. exports increase. d. neither U.S. exports nor U.S. imports increase.