In a world of certainty, the key decisions influenced by the riskless interest rate are
A) risk premiums demanded by investors.
B) portfolio decisions.
C) diversification decisions.
D) consumption versus saving decisions.
D
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Travis always carries $100 in his wallet to pay for groceries. This is an example of the
A) precautionary demand for money. B) asset demand for money. C) transactions demand for money. D) wealth demand for money.
One of the commonly used assumptions in deriving the Heckscher-Ohlin model is that tastes are homothetic, or that if the per capita incomes were the same in two countries, the proportions of their expenditures allocated to each product would be the
same as it is in the other country. Imagine that this assumption is false, and that in fact, the tastes in each country are strongly biased in favor of the product in which it has a comparative advantage. How would this affect the relationship between relative factor abundance between the two countries, and the nature (factor-intensity) of the product each exports? What if the taste bias favored the imported good?
When represented graphically, the government's demand for funds curve is
a. downward sloping b. upward sloping c. vertical d. initially downward sloping, then upward sloping e. initially rightward sloping, then downward sloping
The successor organization to GATT that handles trade disputes among its member nations is the
A) World Trade Organization. B) European Union. C) General Agreement on Tariffs and Trade. D) North American Free Trade Agreement.