Long-term contracts:
A. reduce transaction costs and increase flexibility.
B. can reduce opportunistic behavior.
C. increase transaction costs and increase opportunism.
D. increase transaction costs.
Answer: B
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Refer to the figure above. If the yuan is allowed to float, at exchange rates above E yuan per dollar:
A) the excess supply of dollars in exchange for yuan increases the value of the dollar in the foreign exchange market. B) the excess supply of dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market. C) the excess demand for dollars in exchange for yuan lowers the value of the dollar in the foreign exchange market. D) the excess demand for dollars in exchange for yuan increases the value of the dollar in the foreign exchange market.
Which of the following will increase interest rates in the short run?
A. An decrease in reserve requirements B. Open-market sales by the Fed C. A decrease in real GDP D. A decrease in the price level
Which of the following assets would be considered least liquid?
a. A silver coin b. An antique automobile c. A U.S. savings bond d. A debit card e. A certificate of deposit
The economy of the United States would best be classified as:
a. closed economy b. socialism c. command economy d. A market system