A modern example of privatizing a common resource is:
A. patents.
B. quotas.
C. subsidies.
D. taxes.
Answer: A
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To hedge the interest rate risk on $4 million of Treasury bonds with $100,000 futures contracts, you would need to purchase
A) 4 contracts. B) 20 contracts. C) 25 contracts. D) 40 contracts.
The Bretton Woods system was expected to be more stable than the gold standard because
A) the world supply of gold had increased greatly by the time the Bretton Woods system was established. B) large trade deficits and surpluses would be unlikely to occur under the Bretton Woods system. C) fewer countries were involved in the Bretton Woods system than had been involved in the gold standard. D) the IMF was set up to be a lender of last resort.
Using supply and demand curve analysis, the triangular area below the equilibrium price and above the supply curve is: a. consumer surplus. b. producer surplus. c. marginal cost
d. deadweight loss.
A key result of the equilibrium aggregate expenditure model is that it:
A. can explain why the economy should always be at natural rate GDP. B. illustrates how the government always moves us towards equilibrium GDP. C. can illustrate how an economy can be at an equilibrium that is below natural rate GDP. D. shows how classical notion that the economy will always tend towards natural rate GDP is correct.