If Second National Bank has more rate-sensitive assets than rate-sensitive liabilities, it can reduce interest-rate risk with a swap that requires Second National to
A) pay fixed rate while receiving floating rate.
B) receive fixed rate while paying floating rate.
C) both receive and pay fixed rate.
D) both receive and pay floating rate.
B
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Suppose the government has a budget surplus. Then
A) private saving is less than investment and government saving is positive. B) private saving is greater than investment and government saving is positive. C) private saving is greater than investment and government saving is negative. D) private saving is equal to investment. E) private investment is greater than the sum of government saving and private saving.
Conrad and Meyer (1958) counter Fogel and Engerman's (1974) claim that slave breeding was a myth by arguing that any profit-maximizing slave owner would consider slave breeding as long as:
(a) The expected rate of return from slave sales fell below the costs of rearing the slave to the age of sale. (b) Slavery was an irrational institution. (c) The expected rate of return from slave sales exceeded the costs of rearing the slave to the age of sale. (d) Slavery was an immoral institution.
Predictions of stock prices by stock market analysts
A. usually improve on simple extrapolation of past trends. B. are good both in the short term and in the long term. C. are poor since Wall Street does not pay enough to attract the best analysts. D. are poor because of randomness.
In the short run, international trade allows a monopolistically competitive firm an opportunity:
a. to produce more output. b. to earn monopoly profits. c. to reduce its average costs. d. to produce more output, earn monopoly profits, and reduce its average costs.